AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 2000

REGISTRATION NO. 333-93235
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

AMENDMENT NO. 2

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

BOLT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 7375 13-3905544
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)

304 HUDSON STREET -- 7TH FLOOR
NEW YORK, NY 10013
(212) 620-5900
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
DANIEL A. PELSON
PRESIDENT & CHIEF EXECUTIVE OFFICER
BOLT, INC.
304 HUDSON STREET -- 7TH FLOOR
NEW YORK, NY 10013
(212) 620-5900
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

WITH COPIES TO:

JOHN R. POMERANCE, ESQ. STEVEN R. KAMEN, ESQ. WINTHROP B. CONRAD, JR., ESQ.
PETER S. LAWRENCE, ESQ. VICE PRESIDENT AND GENERAL COUNSEL DAVIS POLK & WARDWELL
MINTZ, LEVIN, COHN, FERRIS, BOLT, INC. 450 LEXINGTON AVENUE
GLOVSKY AND POPEO, P.C. 304 HUDSON STREET -- 7TH FLOOR NEW YORK, NY 10017
ONE FINANCIAL CENTER NEW YORK, NY 10013 (212) 450-4000
BOSTON, MA 02111 (212) 620-5900
(617) 542-6000

------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- ---------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
- ---------------

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
- ---------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
- ------------------------------------------------------------------------------------------------------------------------

Common Stock, $0.001 par value...... 4,255,000 $12.00 $51,060,000 $13,480
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(1) Includes 555,000 shares subject to the underwriters' over-allotment option.

(2) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(a) under the Securities Act.

(3) $12,144 of this fee was previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
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2

THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES, AND WE
ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS (Subject to Completion)

Issued March 2, 2000

3,700,000 Shares

BOLT.COM LOGO
COMMON STOCK

------------------------

Bolt, Inc. is offering shares of its common stock. This is our initial public
offering and no public market currently exists for our shares. We anticipate
that the initial public offering price will be between $10 and $12 per share.

------------------------

We have applied to list our common stock on the Nasdaq National Market under the
symbol "BOLT."

------------------------

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
------------------------

PRICE $ A SHARE

------------------------

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS TO BOLT
-------- ------------- --------

Per Share................................................... $ $ $
Total....................................................... $ $ $

Bolt has granted the underwriters the right to purchase up to an additional
555,000 shares of common stock to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
, 2000.

------------------------

MORGAN STANLEY DEAN WITTER
THOMAS WEISEL PARTNERS LLC
J. P. MORGAN & CO.
, 2000
3

[DESCRIPTION OF GRAPHICS]

The inside front cover displays a large text box in the lower right-hand
corner with the language "2000:" followed by the Bolt logo. Above the logo
appears a series of text boxes, which read from top to bottom: "1969:
Woodstock", "1978: the roller rink", "1983: MTV", and "1991: the mall".

The graphics consist of a two-page fold-out containing a sample of our
website homepage, quotes from several registered users, or members, samples of
click-through pages and applications available on our website and other
statistics concerning our website.

The left column of the fold-out has three quotes from members of our site
which state: "I have met a lotta people here. It's da bomb diggity shish boom
snap"; "On Bolt, we can be open and honest with each other, give advice, and
learn more about people all over" and "I would much rather come to Bolt than
watch TV". The left column also contains a sample of a user profile page which
is accessed from our homepage containing certain information regarding a member.
Additionally, the left column contains a sample of the homepage for our
e-commerce store, which can be accessed from our homepage.

The graphic to the right of the left column at the top of the fold-out
contains our logo as well as the phrase "Bolt empowers teens to express their
opinions, meet new friends, and find the products and services they're
interested in." It also contains the following phrases: "Metrics: 1.5 million
registered members, 141 million page views per month", 6.1 million users
sessions per month".

The lower left corner of the fold-out contains a sample view of the Bolt
homepage, which features links to the various components of the site ("members",
"notes", "email", and "homepages" among others), as well as the "Quote of the
Day", "Hot Stuff from the Store!", "Daily Poll", "About Face", and "New
Features" from the sample view displayed homepage.

To the right of the view of the homepage is a sample of our "About Face"
page, which is accessed from our homepage containing question and answer series
presented by Neutrogena, a sample of the "integrated sponsorships" section of
the site. Above the graphic of the "About Face" page an example of "member-
created content" appears, featuring a link from the "Style & Looks" page. Above
the "Style & Looks" page appears a quote from a member; "The first day I was on
Bolt I made three friends in about an hour. That normally doesn't happen for me
because I'm a shy person."

PROSPECTUS (Subject to Completion)

Issued March 2, 2000

3,700,000 Shares

BOLT.COM LOGO
COMMON STOCK

------------------------

We have applied to list our common stock on the Nasdaq National Market under the
symbol "BOLT."

------------------------

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 6.
------------------------

PRICE $ A SHARE

------------------------

UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS TO BOLT
-------- ------------- --------

Per Share................................................... $ $ $
Total....................................................... $ $ $

Bolt has granted the underwriters the right to purchase up to an additional
555,000 shares of common stock to cover over-allotments.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on
, 2000.

------------------------

MORGAN STANLEY DEAN WITTER
THOMAS WEISEL PARTNERS LLC
J. P. MORGAN & CO.
, 2000
5

[INSIDE FRONT COVER AND GATEFOLD]
6

TABLE OF CONTENTS

PAGE
----

Prospectus Summary.................... 1
Risk Factors.......................... 6
Special Note Regarding Forward-Looking
Statements.......................... 15
Use of Proceeds....................... 16
Dividend Policy....................... 16
Capitalization........................ 17
Dilution.............................. 19
Selected Financial Data............... 20
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 21
Business.............................. 29

PAGE
----

Management............................ 44
Certain Transactions.................. 51
Principal Stockholders................ 53
Description of Capital Stock.......... 55
Shares Eligible for Future Sale....... 58
Underwriters.......................... 60
Legal Matters......................... 62
Experts............................... 62
Where You Can Find Additional
Information......................... 62
Index to Financial Statements......... F-1

------------------------

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock.

UNTIL , 2000 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS THAT BUY, SELL OR TRADE BOLT'S COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
DELIVERY REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

"Bolt," our logo, "Bolt Notes," "BoltEverywhere" and other trademarks of
Bolt, Inc. mentioned in this prospectus are the property of Bolt, Inc. All other
trademarks or trade names referred to in this prospectus are the property of
their respective owners.

i
7

(This page has been left blank intentionally.)
8

PROSPECTUS SUMMARY

This summary highlights the most important features of this offering and
the information contained elsewhere in this prospectus. This summary is not
complete and does not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully, especially the risks of investing in our common stock discussed under
"Risk Factors" beginning on page 6.

BOLT, INC.

Our Web site, Bolt.com, is a leading online destination that targets 15 to
20 year old teens. We feature teen-focused content generated primarily by our
members, a platform for teens to interact with other teens and proprietary tools
that allow our members to personalize their user experience. Our site enables
members to create and actively participate in what we believe is one of the most
teen-relevant environments found anywhere.

We have designed Bolt.com to facilitate communication among teens, to
empower them to express their opinions and ideas as a community and to shop in
an online store that our members help create. While the growth of our site to
date has been driven largely by word-of-mouth, we are also building brand
awareness through relationships with America Online and MSN Hotmail that drive
traffic to our site and with Ford Motor Company and AT&T that expand the
services we provide; these relationships are described in further detail below.
As a result, according to our database, our member base has grown to more than
1.9 million as of February 29, 2000 from about 340,000 as of December 1, 1998.
According to Media Metrix, in December 1999, Bolt.com was the "stickiest" site
for 12 to 17 year old Internet users of all the sites on the Internet, as
measured by minutes per user per month. According to Nielsen I/PRO, we had over
196 million page views and over 6.6 million user sessions in January 2000 as
compared to 28 million page views and 1.4 million user sessions in December
1998. Bolt.com generates revenues through advertising and sponsorship fees
including fees paid for our expertise in managing other companies' relationships
with teens, product sales and transactional fees, and we expect to generate
revenues from market research fees in the future.

Advertisers and retailers have increasingly sought access to a rapidly
growing teen audience. The growth in the number of 10 to 24 year olds is
expected to outpace the growth in the general population by nearly 10% over the
next ten years. Advertisers have turned to the Internet to reach teens because
teens have adopted this medium as a primary form of entertainment, communication
and information gathering. We believe there is a significant opportunity to
advertise and sell products and services to teens online because teens possess
substantial disposable income. Based on third-party market research data, we
believe that online commerce sales to 13 to 17 year olds will increase to $1.4
billion in 2002 from $161 million in 1999.

Bolt.com is a site that empowers our teen audience to express opinions and
ideas regarding the ever-changing issues and trends that impact their lives. Our
members communicate on our site and provide content for our site using their
chosen Bolt Member IDs. This ensures anonymity and encourages frank and open
discussion. Our members provide most of the content of Bolt.com, unlike other
sites where the non-teen staff or third parties generate most of the content.
Because our teen audience determines significant portions of Bolt.com's content,
we believe we deliver a continually relevant experience. Our more than 1.9
million members can also use our personalized tools, such as email, instant
messaging, personal diaries and personal calendars, to help them manage their
lives, making the site more valuable to them the more they use it. In addition,
in September 1999, we launched the online Bolt Store, which offers more than 450
products based on what our members have told us they want to buy. We expect this
to be an increasingly important aspect of our business.

We have developed a site that we believe is highly desirable to advertisers
for the following reasons:

- Audience. We provide a highly-targeted, growing, and
demographically-focused audience.

- Size. We have a large and active user base, as demonstrated by the over
196 million page views and over 6.6 million user sessions in January
2000.

1
9

- Contextual Relevance and Targeting. Marketers can target their messages
in a way that is particularly relevant to the interests of our members.

- Member Loyalty. According to Media Metrix, in December 1999, Bolt.com
was the stickiest site for 12 to 17 year old Internet users of all the
sites on the Internet, as measured by minutes per user per month.

Our goal is to be the leading media company focusing on teens. We intend to
achieve this goal by continuing to build brand awareness, continuing to develop
and extend our relationships with strategic partners and advertisers, enhancing
our online features, expanding our e-commerce offerings and expanding our
international presence.

We currently have strategic relationships that are designed to increase our
brand awareness and drive significant new teen traffic to our site. Our partners
include:

- America Online. We are the only teen community partner for the AOL
branded service's teen message boards and teen chat rooms. We provide
management of AOL's teen community tools, including its teen message
boards and teen chat rooms. In return, we receive brand exposure because
we have established and we maintain a linked, customized, user-generated
content environment at aol.bolt.com, and all teen-focused message
boards, chat rooms, and teen community areas within the AOL service,
including aol.bolt.com, are Bolt branded.

- MSN Hotmail. We provide teen content for the MSN Hotmail WebCourier
Newsletter Program. The Bolt newsletter is delivered twice per week to
over 2.2 million Hotmail users who elected to receive our content when
they registered with Hotmail. We also advertise on the MSN Shopping
Channel, MSN Hotmail and the MSN service targeted to teens.

- Ford Motor Company. On November 17, 1999, we entered into an agreement
with Ford Motor Company to develop Cars.bolt.com, a co-branded
destination on our site, which we launched in January 2000.
Cars.bolt.com features auto-related content geared towards teens.
Cars.bolt.com provides features like personalized classified ads, an
automotive dictionary, teen-focused buyer guides, information on how to
buy or lease a car and an interactive driver's education seminar.

See "Business -- Bolt.com Strategic Relationships" on page 38 for a more
complete description of these agreements.

------------------------

We were incorporated in Delaware on August 15, 1996 as Concrete Media, Inc.
On February 16, 1999, we changed our name to Bolt Media, Inc., and on November
17, 1999, we changed our name to Bolt, Inc. Our principal executive offices are
located at 304 Hudson Street, 7th Floor, New York, New York 10013 and our
telephone number at that address is (212) 620-5900. Our World Wide Web site
address is www.bolt.com. The information on our Web site is not incorporated by
reference into this prospectus.

2
10

THE OFFERING

Common stock offered in this
offering.................... 3,700,000 shares

Common stock to be outstanding
after this offering........... 24,881,985 shares

Use of proceeds............... To expand our marketing and promotion
activities, to launch international operations,
to expand and upgrade our technology
infrastructure, to expand our staff and for
working capital and general corporate purposes,
including possible acquisitions of or
investments in complementary businesses,
products or technologies. See "Use of Proceeds"
on page 16 for a more detailed discussion of
our anticipated use of the proceeds from this
offering.

Proposed Nasdaq National
Market symbol................. BOLT

The information above includes 1,442,803 shares to be issued pursuant to
anti-dilution rights upon the conversion of the Series C preferred stock based
on an assumed initial public offering price of $11.00 per share. These shares
are in addition to the shares to be issued on a 1.25-for-1 basis upon conversion
of the Series C preferred stock without regard to these anti-dilution rights. If
the initial public offering price exceeds $11.00 per share, fewer shares will be
issued pursuant to these anti-dilution rights upon the conversion of the Series
C preferred stock. If the initial public offering price exceeds $14.35 per
share, none of these additional shares will be issued. The information above
does not include:

- 3,508,077 shares of common stock issuable upon the exercise of stock
options outstanding as of February 28, 2000 at a weighted average
exercise price of $1.75 per share; and

- 150,709 shares of common stock issuable upon the exercise of warrants
outstanding as of February 28, 2000 at a weighted average exercise price
of $8.20 per share.

------------------------

Unless otherwise indicated, all information contained in this prospectus:

- Assumes that the underwriters do not exercise their over-allotment
option;

- Reflects a 4-for-1 split of our common stock on November 17, 1999;

- Reflects a 1.25-for-1 split of our common stock on February 29, 2000;
and

- Reflects the mandatory conversion of all of our outstanding shares of
preferred stock into a total of 16,911,142 shares of common stock upon
completion of this offering, including the 1,442,803 additional shares
to be issued pursuant to anti-dilution rights upon the conversion of the
Series C preferred stock based on an assumed initial public offering
price of $11.00 per share.

3
11

SUMMARY FINANCIAL DATA

The following table summarizes our financial data for the period from
August 15, 1996 (date of inception) through December 31, 1996 and for the years
ended December 31, 1997, 1998 and 1999, which have been derived from our
financial statements and the notes to those financial statements. The summary
balance sheet data as of December 31, 1999 are presented (1) on an actual basis,
(2) on a pro forma basis to give effect to:

- our sale of 418,060 shares of our Series D Redeemable Convertible
Preferred Stock for $17.94 per share on February 29, 2000, and

- the mandatory conversion of all of our outstanding preferred stock into
a total of 16,911,142 shares of common stock upon the completion of this
offering, including the 1,442,803 additional shares to be issued
pursuant to anti-dilution rights upon the conversion of the Series C
preferred stock based on an assumed initial public offering price of
$11.00 per share,

and (3) on a pro forma basis as adjusted to give effect to the receipt of the
estimated proceeds from our sale of 3,700,000 shares of common stock in this
offering at an assumed initial public offering price of $11.00 per share, after
deducting the underwriting discounts and commissions and estimated offering
expenses payable by us. For a more detailed explanation of these financial data,
see "Selected Financial Data" on page 20, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" beginning on page 21 and our
financial statements and the notes to those financial statements beginning on
page F-1 of this prospectus.

PERIOD FROM
AUGUST 15, 1996
(DATE OF INCEPTION)
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, --------------------------------------
1996 1997 1998 1999
------------------- ---- ---- ----
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Bolt revenues....................................... $ -- $ 32 $ 404 $ 4,362
Revenues related to the Girls On and custom
publishing divisions.............................. 19 446 2,281 38
---------- ---------- ---------- ----------
Total revenues............................. 19 478 2,685 4,400
---------- ---------- ---------- ----------
Costs and expenses:
Production and technology......................... 15 810 1,138 3,526
E-commerce........................................ -- -- -- 1,119
Sales and marketing............................... 1 287 630 9,084
General and administrative........................ 51 549 1,327 1,766
Depreciation and amortization..................... 4 25 75 536
Stock-based compensation.......................... -- -- -- 3,007
---------- ---------- ---------- ----------
Total costs and expenses................... 71 1,671 3,170 19,038
---------- ---------- ---------- ----------
Loss from operations................................ (52) (1,193) (485) (14,638)
Other income (expense):
Interest income................................... -- 42 7 418
Interest expense.................................. -- -- (60) (133)
Gain on sale of Girls On.......................... -- -- -- 1,436
---------- ---------- ---------- ----------
Net loss............................................ $ (52) $ (1,151) $ (538) $ (12,917)
========== ========== ========== ==========
Basic loss per share................................ $ (.01) $ (.21) $ (.10) $ (3.43)
========== ========== ========== ==========
Weighted average number of shares of common stock
outstanding used in computing basic loss per
share............................................. 5,500,000 5,500,000 5,461,063 3,765,080
========== ========== ========== ==========

4
12

AS OF DECEMBER 31, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- -------------- -----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Cash and cash equivalents................................... $37,148 $44,648 $ 81,499
Working capital............................................. 32,606 40,106 76,957
Total assets................................................ 44,534 52,034 88,885
Capital lease obligations, less current portion............. 514 514 514
Redeemable convertible preferred stock...................... 46,712 -- --
Stockholders' equity (deficiency)........................... (9,850) 44,362 81,213

We calculate loss per common share by dividing the loss attributable to
common shares by the weighted average number of shares outstanding. We do not
include outstanding common stock options, outstanding warrants or the conversion
of our outstanding convertible preferred stock in the loss per common share
calculation as their effect is anti-dilutive. The Series B and Series C
preferred stock have been recorded at their redemption values, net of offering
costs, and have been classified as redeemable convertible preferred stock on our
balance sheet as of December 31, 1999.

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13

RISK FACTORS

This offering and an investment in our common stock involve a high degree
of risk. You should carefully consider the following risk factors and the other
information in this prospectus before investing in our common stock. Our
business and results of operations could be seriously harmed by any of the
following risks. This could cause the trading price of our common stock to
decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

WE HAVE A LIMITED HISTORY OPERATING OUR TEEN-FOCUSED WEB SITE, AND WE MAY FACE
DIFFICULTIES ENCOUNTERED BY NEW COMPANIES IN NEW AND RAPIDLY EVOLVING INDUSTRIES

We were founded in August 1996. In addition to our teen-focused Web site,
Bolt.com, we also operated until the end of 1998 a custom publishing division,
which provided Web site development services to third-party non-advertising
customers, and the Girls On division, which provided online content and
community written by and focused toward young women. We sold the custom
publishing division in December 1998 and the Girls On division in January 1999.
Accordingly, you should consider the risks and uncertainties frequently
encountered by companies with limited operating histories in new and rapidly
evolving industries, such as the Internet and e-commerce. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" beginning on page 21 for detailed information on our limited
operating history.

YOU SHOULD NOT RELY ON OUR HISTORICAL AND PRO FORMA FINANCIAL INFORMATION IN
DECIDING WHETHER TO INVEST IN OUR COMMON STOCK, BECAUSE THIS INFORMATION WILL
LIKELY NOT BE REPRESENTATIVE OF OUR RESULTS IN THE FUTURE

The financial information included in this prospectus through December 1998
combines the operating results of our then-existing custom publishing division
and the Girls On division, which were sold in December 1998 and January 1999,
respectively. This information does not reflect what our results of operations,
financial position and cash flows would have been if we were only operating our
teen-focused Web site during the periods presented, or what our results of
operations, financial position and cash flows will be in the future.
Accordingly, you should not rely on our historical information as an indication
of our future operating results or financial performance.

WE HAD AN ACCUMULATED DEFICIT OF $14.7 MILLION AS OF DECEMBER 31, 1999; WE
EXPECT OUR LOSSES TO CONTINUE AND WE MAY NEVER BECOME PROFITABLE

We have had substantial losses since our inception and our operating and
net losses may increase in the future. Accordingly, we may never become or
remain profitable. If our revenues fail to grow at anticipated rates, our
operating expenses increase without an equal increase in our revenues or we fail
to adjust operating expense levels accordingly, our business, results of
operations and financial condition will suffer. As of December 31, 1999, we had
an accumulated deficit of $14.7 million. Although we have experienced growth in
revenues, members and customers in recent periods, our growth in revenues may
not continue at its current rate or increase in the future.

We have not yet become profitable on a quarterly or annual basis, and we
anticipate that we will continue to incur operating and net losses. The extent
of these losses will depend, in part, on the amount of growth in our advertising
revenues, e-commerce revenues and market research revenues. We expect that our
operating expenses will increase significantly, especially in the areas of Web
site development, sales and marketing and brand promotion, and, as a result, we
will need to substantially increase our revenues to become profitable.

6
14

IF WE DO NOT INCREASE CASH GENERATED BY OUR BUSINESS OPERATIONS, WE MAY IN THE
FUTURE BE REQUIRED TO FINANCE OPERATIONS BY SELLING ADDITIONAL SECURITIES, WHICH
WOULD REDUCE THE PERCENTAGE OWNERSHIP OF EXISTING STOCKHOLDERS AND MAY AFFECT
THE RIGHTS OF EXISTING STOCKHOLDERS

To date, we have not generated sufficient cash from operations and have
funded our operations primarily from the sale of equity securities. We must
significantly increase our cash revenues in order to fund our operations in the
future. If our cash flows are insufficient to fund our operations, we may in the
future need to generate cash through the sale of additional equity or
convertible debt securities. If we do this, it would reduce the percentage
ownership of existing stockholders. Furthermore, it may be necessary for us to
issue securities that have rights, preferences and privileges senior to our
common stock.

WE EXPECT OUR RESULTS OF OPERATIONS TO FLUCTUATE AND THE PRICE OF OUR COMMON
STOCK COULD FALL IF QUARTERLY RESULTS ARE LOWER THAN THE EXPECTATIONS OF
SECURITIES ANALYSTS

Our revenues and results of operations have fluctuated in the past and may
vary from quarter to quarter in the future. If our quarterly results fall below
the expectations of securities analysts, the price of our common stock could
fall. A number of factors, many of which are outside our control, may cause
variations in our results of operations, including:

- fluctuations in the demand for Internet advertising or e-commerce;

- changes in the level of traffic on our site; and

- fluctuations in sales and marketing expenses and technology
infrastructure costs.

A substantial portion of our operating expenses is related to sales and
marketing, product development, technology and infrastructure, which expenses
cannot be adjusted quickly and are therefore relatively fixed in the short term.
Our operating expense levels are based, in significant part, on our expectations
of future revenues on a quarterly basis. As a result, if revenues for a
particular quarter are below our expectations, we may not be able to reduce
operating expenses proportionately for that quarter; this revenue shortfall
would have a negative effect on our operating results and cash flow for that
quarter, which would likely have a negative impact on the price of our common
stock.

WE MAY BE UNABLE TO SELL ADDITIONAL ADVERTISING OR MAINTAIN OUR CURRENT LEVEL
OF ADVERTISING SALES, IN WHICH CASE OUR REVENUES WOULD BE ADVERSELY AFFECTED

We currently derive most of our revenues from the sale of advertisements on
our Web site. We may be unable to sell additional advertising on our site or
maintain our current level of advertising sales. Most of our advertisers have
limited experience with the Internet as an advertising medium. Our ability to
generate significant advertising revenues depends upon several factors,
including:

- the desirability of our member base to potential advertisers;

- our ability to continue to develop and update effective advertising
delivery and measurement systems; and

- our ability to maintain and increase our advertising rates given the
growing number of outlets for advertisers on the Internet.

OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT A SUFFICIENT NUMBER OF TEEN
INTERNET USERS TO OUR WEB SITE; WE MAY NOT BE ABLE TO DO SO

We must deliver original and compelling Internet content, community,
shopping and personalized tools that attract a sufficient number of teen
Internet users to our Web site. We may be unable, however, to anticipate,
monitor or successfully respond to the rapidly changing consumer tastes and
preferences of our targeted teen audience so as to attract enough users to our
site. If we are unable to deliver content, community and services that attract,
retain and expand a loyal member base, we will be unable to generate substantial
advertising revenues or commerce revenues.

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WE HAVE ONLY RECENTLY LAUNCHED THE BOLT STORE; WE HAVE NO PRIOR EXPERIENCE IN
CONDUCTING A DIRECT E-COMMERCE OPERATION AND OUR BUSINESS COULD BE HARMED IF THE
BOLT STORE IS NOT SUCCESSFUL

Prior to our launch of the Bolt Store in September 1999, we had no
experience in conducting a direct e-commerce business. We may be unable to
achieve or maintain any or all of the necessary components of a successful
e-commerce operation, such as timely and efficient order processing and
fulfillment and efficient customer support services. Our failure to successfully
operate the Bolt Store could seriously harm our brand and our business.

BECAUSE WE DEPEND ON THIRD PARTIES TO SUPPLY PRODUCTS AND SHIP ORDERS TO
CUSTOMERS OF THE BOLT STORE AND FOR CUSTOMER SUPPORT, ANY FAILURE OF THESE
PARTIES TO PROVIDE QUALITY SERVICES MAY SERIOUSLY HARM OUR BRAND AND BUSINESS

We depend on third parties to provide services to customers of the Bolt
Store, and the failure of these third parties to provide quality services could
seriously harm our brand and business. Although we choose which products to
offer in the Bolt Store based on input from our members, we have selected a
number of third-party sources to supply the products from their warehouses and
drop-ship orders to our customers after receiving order confirmation from us. In
addition, we have outsourced the customer support function of the Bolt Store to
a third party. Accordingly, we are dependent on these third-party warehouses for
timely and accurate order fulfillment and upon our third-party customer support
service for efficient and informative customer support services. Because these
services are provided by third parties, we have limited control over the quality
of these services.

WE DEPEND ON THE SERVICES OF A NUMBER OF KEY PERSONNEL, AND A LOSS OF ANY OF
THOSE PERSONNEL COULD DISRUPT OUR OPERATIONS AND RESULT IN REDUCED REVENUES

Our success depends on the continued services and on the performance of our
senior management and other key employees, in particular the services of Daniel
A. Pelson, our President and Chief Executive Officer. The loss of the services
of Mr. Pelson or any of our other senior management or key employees could
seriously impair our ability to operate and improve our products and services,
which could reduce our revenues.

In order to achieve our business objectives, we must hire additional
personnel to fill certain key managerial positions. Our future success will
depend upon the ability of our current executive officers to establish clear
lines of responsibility and authority, to work effectively as a team, and to
gain the trust and confidence of our other employees. We must also identify,
attract, train, motivate and retain other highly skilled technical, managerial,
marketing and sales personnel. We compete intensely for these personnel and we
may be unable to achieve our personnel goals. Our failure to achieve any of
these goals could seriously limit our ability to improve our operations and
financial results.

WE PLAN TO EXPAND OUR ADVERTISING SALES FORCE TO INCREASE THE EFFECTIVENESS OF
OUR INTERNAL SALES ORGANIZATION, AND IF WE FAIL TO DO SO WE MAY FAIL TO ATTRACT
SPONSORSHIP AND ADVERTISING REVENUES

We believe we will need to substantially increase our sales force in the
coming year in order to execute our business plan, but we may not be able to do
so. We hired our Vice President of Ad Sales in May 1999, and our internal sales
team currently has 26 members. We believe that the growth of our sponsorship and
advertising revenues will depend on our ability to expand our sales force in
order to establish an aggressive and effective internal sales organization. Our
ability to increase our sales force involves a number of risks and
uncertainties, including competition for these personnel and the length of time
for new sales employees to become productive. If we do not develop an effective
internal sales force, we may be unable to attract sponsorship and advertising
revenues.

GROWTH IN OUR OPERATION HAS AND WILL CONTINUE TO STRAIN OUR RESOURCES; OUR
FAILURE TO MANAGE GROWTH EFFECTIVELY COULD HARM OUR BUSINESS

If we are unable to successfully manage our growth, our business could be
seriously harmed. We have recently experienced significant growth and are
planning to further expand our business and operations. As of
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February 29, 2000, we had 170 employees, compared to 16 employees as of January
1, 1999. This growth has placed, and our planned future growth is expected to
place, a significant strain on our management and other resources. As part of
this growth, we expect to implement new operational and financial systems,
procedures and controls. Any problems in implementing these systems or controls
could harm our operations. In addition, several members of our senior management
joined us during the last year, including our:

- Chief Financial Officer;

- Executive Vice President;

- Vice President and General Counsel;

- Vice President of Commerce;

- Chief Technology Officer;

- Vice President of Business Development;

- Vice President of Ad Sales; and

- Vice President of Business Intelligence.

As a result, our management team may have difficulty working together to
successfully manage our anticipated growth.

WE INTEND TO EXPAND OUR BUSINESS; IF WE ARE NOT SUCCESSFUL, OUR BUSINESS COULD
BE SERIOUSLY HARMED

If we are not successful in expanding our business, our brand and business
could be seriously harmed. We may choose to expand our operations by promoting
new or complementary products and services, increasing the breadth and depth of
products and services offered or expanding our market presence through
relationships with third parties or developing new Web sites. In addition, we
may pursue the acquisition of new or complementary businesses or technologies,
although we have no present understandings, commitments or agreements with
respect to any material acquisitions or investments. However, we may not be able
to successfully expand our business and operations in a cost-effective or timely
manner, and we cannot be certain that any of these efforts would increase
overall market acceptance. Furthermore, any new product, service or Web site
that we launch that is not favorably received could damage our reputation or our
brand recognition. Expansion of our operations in this manner could also require
significant additional expenditures and would strain our management, financial
and operating resources.

WE MUST CONTINUE TO ESTABLISH AND MAINTAIN STRATEGIC ALLIANCES TO GENERATE
TRAFFIC TO OUR SITE, WHICH WE MAY NOT BE ABLE TO DO

If we do not continue to establish and maintain strategic alliances that
drive traffic to our site, our business could be seriously harmed. We believe
that strategic alliances with high-traffic Internet sites and leading Internet
portals to ensure the visibility of our Web site and to generate additional
traffic to our site are important to our future growth. We currently have
relationships with America Online, Yahoo!, MSN Hotmail and Lycos. Our business
could be seriously harmed if we do not establish and maintain additional
relationships on commercially reasonable terms or if any of our relationships do
not result in increased traffic and visibility. Many of our current alliances
are based on short-term agreements. There is intense competition among Internet
sites for online strategic relationships. We may not be able to enter into new
or renewed relationships on commercially reasonable terms or at all. In
addition, our existing online strategic relationships or any relationships that
we enter into in the future may not generate enough additional traffic from teen
users to our Web site or create sufficient brand visibility to justify the costs
we incur for these relationships.

OUR SYSTEMS ARE MANAGED BY A THIRD PARTY AND ANY SYSTEMS FAILURE MAY CAUSE
INTERRUPTIONS OF OUR SERVICES, WHICH COULD IMPAIR OUR ADVERTISING REVENUES, OUR
REPUTATION AND THE ATTRACTIVENESS OF OUR BRAND

The performance of our server and networking hardware and software
infrastructure is critical to our business and reputation and our ability to
attract Internet users and advertisers to our site. Substantially all of our
computer and communications hardware and software required for Internet access
is currently housed at

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Exodus Communications, Inc. in New Jersey. We are dependent on the services of
this provider, and its systems and operations are vulnerable to damage or
interruption from computer viruses, fire, power loss, telecommunications
failures, vandalism and other malicious acts, and similar unexpected adverse
events. We do not presently have a formal disaster recovery plan and may not
carry sufficient business interruption insurance to compensate us for losses
that may occur. If systems failures were sustained or repeated, our revenues,
our reputation and the attractiveness of our brand could be impaired. In
addition, because we have incorporated third-party software into our systems and
we depend upon a third party provider to afford members access to our products
and services, we are limited in our ability to prevent systems failures.

WE PLAN TO EXPAND INTERNATIONALLY, BUT BECAUSE OF THE RISKS INVOLVED WITH
OPERATING A BUSINESS IN FOREIGN COUNTRIES, WE MAY NOT BE SUCCESSFUL AND OUR
BUSINESS COULD BE SERIOUSLY HARMED

If our revenues associated with our planned expansion into international
markets are not adequate to offset investments in international activities, our
business could be seriously harmed. Although we currently operate primarily in
the United States, we plan to expand globally. However, we may experience
difficulty in managing international operations because of distance, as well as
language and cultural differences, and we may not be able to successfully market
and operate our site in foreign markets. There are also risks that are inherent
in transacting business internationally, including:

- unexpected changes in regulatory requirements;

- export restrictions and trade barriers, which may make it difficult or
impossible to sell products to overseas customers;

- difficulties in staffing and managing foreign operations, which may make
it difficult or impossible to operate in some countries;

- fluctuations in currency exchange, which may decrease the value of
foreign currency in relation to the U.S. dollar, making the products we
sell more expensive overseas or decreasing our foreign derived revenues
when converted to U.S. dollars; and

- potential adverse tax consequences, which may decrease our revenues from
foreign sales.

WE MAY BE LIABLE FOR LEGAL CLAIMS BASED ON THE NATURE AND CONTENT OF OUR
SERVICES AND MEMBER-GENERATED INFORMATION

The features that we offer on Bolt.com that enable our teen members to
exchange information, buy products and services, and engage in various online
activities may expose us to liability and could seriously harm our business.
Claims could be made against us for negligence, defamation, libel, copyright or
trademark infringement, personal injury or other legal claims based on the
nature and content of information that may be posted online by our members. We
also offer Internet-based email services, which expose us to potential risks,
including liabilities or claims resulting from unsolicited email, lost or
misdirected messages, illegal or fraudulent use of email, or interruptions or
delays in email service. The laws relating to the liability of providers of
online services for the activities of their users are currently unsettled.

In addition, we could be exposed to liability arising from the activities
of users of our content or services or with respect to the unauthorized
duplication or insertion of illegal or inappropriate material accessed directly
or indirectly through our services. Several private lawsuits seeking to impose
such liability upon content providers, online services companies and Internet
access providers are currently pending. In addition, laws currently impose
liability for, and in some cases prohibit, the transmission over the Internet of
some types of information. These laws or similar laws enacted in the future
could expose us to significant liabilities associated with our content or
services. We may not have adequate insurance to compensate us in the event we
become liable for our content or services. Any liability in excess of our
insurance could seriously harm our business and results of operations.

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PRIVACY CONCERNS AND GOVERNMENT REGULATIONS COULD IMPAIR OUR ABILITY TO OBTAIN
INFORMATION ABOUT OUR MEMBERS, WHICH WOULD AFFECT OUR ABILITY TO TAILOR OUR
ONLINE OFFERINGS TO OUR MEMBERS AND THE ABILITY OF ADVERTISERS TO CREATE
TARGETED ADVERTISING CAMPAIGNS

Our Web site captures information regarding our members in order to allow
us to tailor our online offerings to them and assist advertisers in targeting
their advertising campaigns. However, privacy concerns and government regulation
may make it difficult to collect the personal data necessary to support this
tailoring capability. Even the perception of security and privacy issues,
whether or not valid, may indirectly inhibit our ability to collect information
regarding our members. In addition, the U.S. government has recently adopted
regulations limiting and regulating the collection, use and disclosure of
personal information obtained from children under the age of 13. Further
legislation or regulations regarding Internet privacy that affect the way we
conduct our business may be adopted in the U.S. Other countries and political
entities, like the European Union, have also adopted legislation or regulatory
requirements regarding the collection and use of personal data. If consumer
privacy concerns are not adequately addressed or if we fail to comply with
current or future regulatory requirements regarding privacy, our business and
results of operations could be seriously harmed. For a more detailed discussion
of how government regulations may affect our business, see "Business --
Government Regulation" beginning on page 40.

WE MAY EXPEND SIGNIFICANT RESOURCES TO PROTECT OUR INTELLECTUAL PROPERTY
RIGHTS OR TO DEFEND CLAIMS OF INFRINGEMENT BY THIRD PARTIES, AND IF WE ARE NOT
SUCCESSFUL WE MAY LOSE RIGHTS TO USE SIGNIFICANT MATERIAL OR BE REQUIRED TO PAY
SIGNIFICANT FEES

Our success depends on the protection of our original interactive content
and on the goodwill associated with our trademarks and other proprietary
intellectual property rights. Enforcing our intellectual property rights could
entail significant expense and could prove difficult or impossible. A
substantial amount of uncertainty exists concerning the application of copyright
and trademark laws to the Internet and other digital media, and existing laws
may not provide adequate protection of our content or our Internet addresses,
commonly referred to as domain names. We have filed applications in the United
States and other countries to register a number of our trademarks and acquire
domain names; however, we cannot assure you that registration will be granted or
we will be able to use these domain names.

In addition, in the future third parties might bring claims of copyright or
trademark infringement, patent violation or misappropriation of creative ideas
or formats against us with respect to our content or any third-party content
carried by us. Any such claims, with or without merit, could be time consuming
to defend, result in costly litigation, divert management attention, require us
to enter into costly royalty or licensing arrangements or prevent us from using
important technologies, ideas or formats.

WE MAY NOT BE ABLE TO ADAPT AS INTERNET TECHNOLOGIES AND CLIENT DEMANDS
CONTINUE TO EVOLVE

To be successful, we must adapt to rapidly changing Internet technologies
and continually enhance the features and services provided on our Web site,
which we may not be able to do. We could incur substantial and unanticipated
costs if we need to modify our Web site, software and infrastructure to
incorporate new technologies demanded by our teen members and customers. We may
use new technologies ineffectively or we may fail to adapt our Web site and
network infrastructure to user requirements or emerging industry standards. If
we fail to keep pace with the technological demands of our members and customers
for new teen-focused services, products and enhancements, our business may be
seriously harmed.

WE MAY NEED ADDITIONAL FINANCING FOR OUR FUTURE CAPITAL NEEDS, WHICH WE MAY
NOT BE ABLE TO OBTAIN

Because of our expected negative cash flow, we may need to raise additional
funds in the future, which we may not be able to do. Based on our current
operating plans, we anticipate that the net proceeds from this offering,
together with available funds, will be sufficient to meet our anticipated needs
for at least the next 12 months. We may need additional financing sooner if we:

- decide to expand faster than planned;

- develop new or enhanced services or products ahead of schedule;

- need to respond more quickly than anticipated to competitive pressures;
or

- decide to acquire complementary products, businesses or technologies.

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We may not be able to raise additional funds on terms favorable to us, or at
all. If future financing is not available or is not available on acceptable
terms, we may not be able to fund our future needs, which would seriously affect
our ability to conduct our business as planned.

RISKS RELATED TO THE INTERNET INDUSTRY

WE ARE DEPENDENT ON THE CONTINUED GROWTH AND DEVELOPMENT OF THE INTERNET AND
ITS INFRASTRUCTURE, WHICH IS NOT CERTAIN

We cannot be certain that growth in the Internet will continue or that a
sufficient number of consumers will adopt and continue to use the Internet and
other online services. Our future success depends on the continued growth in,
and increased use of, the Internet. Internet usage may be inhibited for a number
of reasons, including:

- inadequate Internet infrastructure;

- security concerns;

- inconsistent quality of service; or

- unavailability of cost-effective, high-speed service.

We cannot be certain that the Internet infrastructure will be able to
support the expected growth or that the performance and reliability of the
Internet will not decline as result of this growth. In addition, Web sites,
including ours, have experienced a variety of interruptions in their service as
a result of outages and other delays occurring throughout the Internet network
infrastructure. If these outages or delays occur frequently in the future, Web
usage, including usage of our Web site, could grow more slowly than anticipated
or decline.

OUR FUTURE SUCCESS DEPENDS SIGNIFICANTLY ON THE ACCEPTANCE AND EFFECTIVENESS
OF THE INTERNET AS AN ADVERTISING MEDIUM, WHICH IS UNCERTAIN

Our future success depends significantly on increasing our online
advertising revenues. We cannot be certain that the Internet advertising market
will continue to emerge or will ever become sustainable, and if it does not, our
advertising revenues may decline. Online advertising is new and rapidly
evolving. It cannot yet be compared with traditional advertising media, like
television and print, to gauge its effectiveness. As a result, there is
significant uncertainty about the demand and market acceptance for online
advertising. Many of our current or prospective clients have little experience
using the Internet for advertising purposes. The adoption of online advertising,
particularly by entities that have historically relied on traditional media for
advertising, requires the acceptance of a new way of conducting business. These
businesses may find online advertising to be less effective for promoting their
products and services as compared to traditional advertising.

THE SUCCESS OF THE BOLT STORE DEPENDS ON THE DEVELOPMENT OF THE E-COMMERCE
MARKET, WHICH IS UNCERTAIN

The success of the Bolt Store depends upon the widespread acceptance and
use of the Internet as an effective medium of commerce by consumers, which
cannot be assured. Rapid growth in the use of the Internet and commercial online
services is a recent phenomenon. Demand for recently introduced services and
products over the Internet and online services is subject to a high level of
uncertainty. The development of the Internet and e-commerce as a viable
commercial marketplace is subject to a number of factors, including the
following:

- e-commerce is at an early stage and buyers may be unwilling to shift
their purchasing habits from traditional retailers to e-commerce
retailers;

- insufficient availability of telecommunications services or changes in
telecommunications services could result in slower response times; and

- adverse publicity and consumer concern about the security of e-commerce
transactions could discourage its acceptance and growth.

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BREACHES OF SECURITY ON THE INTERNET MAY ADVERSELY AFFECT OUR BUSINESS BY
SLOWING THE GROWTH OF SALES IN THE BOLT STORE AND ONLINE ADVERTISING AND EXPOSE
US TO LIABILITY

The need to securely transmit confidential information, including credit
card and other personal information, over the Internet has been a significant
barrier to e-commerce and communications over the Internet. Any well-publicized
compromise of security could deter more people from using the Internet or from
using it to conduct transactions that involve transmitting confidential
information, like purchasing goods or services. Furthermore, decreased traffic
and e-commerce sales as a result of general security concerns could cause
advertisers to reduce their amount of online spending. To the extent that our
activities involve the storage and transmission of proprietary information, like
credit card information, security breaches could disrupt our business, damage
our reputation and expose us to a risk of loss or litigation and possible
liability. We could also be liable for claims based on the misuse of personal
information, such as for unauthorized marketing purposes. We may need to spend a
great deal of money and use other resources to protect against the threat of
security breaches or to alleviate problems caused by these breaches.

WE FACE RISKS ASSOCIATED WITH GOVERNMENT REGULATION OF AND LEGAL UNCERTAINTIES
SURROUNDING THE INTERNET

Any new law or regulation pertaining to the Internet, or the application or
interpretation of existing laws, could increase our cost of doing business or
otherwise adversely affect our business. Laws and regulations directly
applicable to Internet communications, commerce and advertising are becoming
more prevalent. The law governing the Internet, however, remains largely
unsettled, even in areas where there has been some legislative action. It may
take years to determine whether and how existing laws governing intellectual
property, copyright, privacy, obscenity, libel and taxation apply to the
Internet. In addition, the growth and development of e-commerce may prompt calls
for more stringent consumer protection laws, both in the United States and
abroad. See "Business--Government Regulation" beginning on page 40 for a more
detailed discussion on government regulation of the Internet.

RISKS ASSOCIATED WITH THIS OFFERING

SUBSTANTIAL SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK PRICE TO FALL

Sales of a substantial number of shares of our common stock after this
offering could cause our stock price to fall. Our current stockholders hold a
substantial number of shares, which they will be able to sell in the public
market in the near future. All of the 3,700,000 shares sold in this offering
will be freely tradable. The remaining 21,181,985 shares outstanding are
restricted securities as defined in Rule 144 of the Securities Act of 1933. Of
these shares, about 296,145 shares will become freely tradable at various times
within 180 days of the date of this prospectus, 14,185,723 shares will become
freely tradable on the date that is 180 days after the date of this prospectus
and 6,700,117 shares will become freely tradable at various times thereafter.
For a more detailed description of the eligibility of shares for sale into the
public market following this offering, see "Shares Eligible for Future Sale"
beginning on page 58.

FUTURE ISSUANCES OF PREFERRED STOCK MAY DILUTE THE RIGHTS OF OUR COMMON
STOCKHOLDERS

Our board of directors will have the authority to issue up to 5,000,000
shares of preferred stock and to determine the price, rights, privileges and
other terms of these shares. The board of directors may exercise this authority
without the approval of the stockholders. The rights of the holders of common
stock may be adversely affected by the rights of the holders of any preferred
stock that may be issued in the future.

ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW AND OUR CHARTER COULD MAKE A
THIRD-PARTY ACQUISITION OF US DIFFICULT

Because we are a Delaware corporation, the anti-takeover provisions of
Delaware law could make it more difficult for a third party to acquire control
of us, even if the change in control would be beneficial to stockholders. We are
subject to the provisions of Section 203 of the General Corporation Law of
Delaware. Section 203 will prohibit us from engaging in certain business
combinations, unless the business combination is approved in a prescribed
manner. Accordingly, Section 203 may discourage, delay or prevent someone from

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acquiring or merging with us. In addition, upon completion of this offering, our
certificate of incorporation and bylaws will contain certain provisions that may
make a third party acquisition of us difficult, including:

- a classified board of directors, with three classes of directors each
serving a staggered three-year term;

- the ability of the board of directors to issue preferred stock; and

- the inability of our stockholders to call a special meeting or act by
written consent.

WE MAY EXPERIENCE VOLATILITY IN OUR STOCK PRICE THAT COULD NEGATIVELY IMPACT
YOUR INVESTMENT

Prior to this offering, you could not buy or sell our common stock
publicly. An active public market for our common stock may not develop or be
sustained after this offering. The market price of our common stock, like the
market for Internet-related and technology companies in general, may be highly
volatile and this could impact the value of your investment. In addition, the
initial public offering price may bear no relationship to the price at which the
common stock will trade upon completion of this offering. The initial public
offering price will be determined based on negotiations between us and the
representatives of the underwriters, based on factors that may not be indicative
of future market performance. The market price of our common stock may fluctuate
significantly in response to a number of factors, some of which are beyond our
control, including:

- quarterly variations in results;

- changes in financial estimates by securities analysts;

- changes in market valuation of Internet companies;

- announcements by us of significant contracts, acquisitions, strategic
partnerships, joint ventures or capital commitments;

- additions or departures of key personnel;

- any shortfall in revenues or net income or any increase in losses from
levels expected by securities analysts;

- future sales of common stock; and

- stock market price and volume fluctuations, which are particularly
common among securities of Internet companies.

OUR MANAGEMENT WILL HAVE BROAD DISCRETION AS TO THE USE OF PROCEEDS FROM THIS
OFFERING

Our management will have broad discretion as to the use of proceeds from
this offering. While we currently anticipate that we may use the net proceeds of
this offering as described in "Use of Proceeds," management may allocate the net
proceeds among these purposes as it determines is necessary. In addition, market
factors may require management to allocate all or portions of the net proceeds
for other purposes. Accordingly, you will be relying on the judgment of our
management with regard to the use of proceeds from this offering. See "Use of
Proceeds" on page 16 for a more detailed discussion of the use of proceeds from
this offering.

YOU WILL EXPERIENCE IMMEDIATE DILUTION IN THE BOOK VALUE PER SHARE OF THE
COMMON STOCK YOU PURCHASE

Because the price per share of our common stock being offered is
substantially higher than the book value per share of our common stock, you will
suffer substantial dilution in the net tangible book value of the common stock
you purchase in this offering. Based on an assumed initial public offering price
of $11.00 per share, if you purchase shares of common stock in this offering,
you will suffer immediate and substantial dilution of $7.74 per share in the net
tangible book value of the common stock. See "Dilution" on page 19 for a more
detailed discussion of the dilution you will incur in this offering.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," and elsewhere in this prospectus constitute
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. In some
cases, you can identify forward-looking statements by terminology like "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these terms or other
comparable terminology.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are under no duty to update any of the
forward-looking statements after the date of this prospectus to conform these
statements to actual results.

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USE OF PROCEEDS

The net proceeds that we will receive from our sale of shares of common
stock in this offering are estimated to be $36.9 million, after deducting the
estimated underwriting discounts and commissions and offering expenses payable
by us and assuming an initial public offering price of $11.00 per share. If the
underwriters exercise their over-allotment option in full, we estimate the net
proceeds from this offering will be $42.5 million. We estimate our offering
expenses to be about $1.0 million.

Our management will have broad discretion as to the use of proceeds from
this offering. We currently anticipate that we may use the net proceeds of this
offering for the following purposes; however, we have not determined the amounts
we may spend on any of these areas or the timing of any expenditures:

- to expand our marketing and promotion activities to increase our brand
awareness;

- to launch international operations;

- to expand and upgrade our technology infrastructure;

- to expand our staff, particularly our sales and business development
force; and

- for working capital and general corporate purposes, including possible
acquisitions of or investments in complementary businesses, products or
technologies.

At the present time, we have no understandings, commitments or agreements with
respect to any material acquisition. The foregoing discussion is based on our
current expectations, and we may allocate the net proceeds among these purposes
as we deem necessary or appropriate. These determinations will be based upon
various factors, a number of which are not yet known, including the time
actually required to reach profitability, the availability of qualified
personnel and the increase, if any, of the traffic to our Web site. In addition,
these and other market factors may require us to allocate portions of the net
proceeds for purposes other than those described above. Pending the use of the
net proceeds of this offering, we intend to invest these proceeds in short-term,
interest-bearing, investment-grade securities. See "Risk Factors--Risks
Associated with This Offering--Our management will have broad discretion as to
the use of proceeds from this offering" on page 14.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We
intend to retain any earnings to fund our future growth and the operation of our
business. Therefore, we do not anticipate paying any cash dividends in the
foreseeable future. In addition, our loan and security agreement with Lighthouse
Capital Partners III, L.P. currently prohibits the payment of dividends.

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CAPITALIZATION

The following table shows our cash and cash equivalents, long-term debt,
stockholders' equity and capitalization as of December 31, 1999 (1) on an actual
basis, (2) on a pro forma basis to give effect to:

- our sale of 418,060 shares of our Series D Redeemable Convertible
Preferred Stock for $17.94 per share on February 29, 2000, and

and (3) on a pro forma basis as adjusted to give effect to the receipt of the
estimated proceeds from our sale of 3,700,000 shares of common stock in this
offering at an assumed initial public offering price of $11.00 per share, after
deducting the underwriting discounts and commissions and estimated offering
expenses payable by us. This information should be read in conjunction with our
financial statements and the notes to those financial statements beginning on
page F-1 of this prospectus.

AS OF DECEMBER 31, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Cash and cash equivalents............................. $ 37,148 $ 44,648 $81,499
======== ======== =======
Long-term debt:
Total long-term debt................................ $ 514 $ 514 $ 514
-------- -------- -------
Redeemable convertible preferred stock:
Series B-1, $.001 par value; 1,048,387 shares
authorized, issued and outstanding actual;
1,048,387 shares authorized, no shares issued and
outstanding pro forma; no shares authorized,
issued and outstanding pro forma as adjusted..... 6,132 -- --
Series B-2, $.001 par value; 268,818 shares
authorized, issued and outstanding actual;
268,818 shares authorized, no shares issued and
outstanding pro forma; no shares authorized,
issued and outstanding pro forma as adjusted..... 1,887 -- --
Series B-3, $.001 par value; 1,975 shares
authorized, no shares issued and outstanding
actual and pro forma; no shares authorized,
issued and outstanding pro forma as adjusted..... -- -- --
Series C, $.001 par value; 4,400,000 shares
authorized, 3,787,801 shares issued and
outstanding actual; 4,400,000 shares authorized,
no shares issued and outstanding pro forma; no
shares authorized, issued and outstanding pro
forma as adjusted................................ 38,693 -- --
Series D, $.001 par value; no shares authorized,
issued and outstanding actual; 418,060 shares
authorized, no shares issued and outstanding pro
forma; no shares authorized, issued and
outstanding pro forma as adjusted................ -- -- --
-------- -------- -------
Total redeemable convertible preferred stock..... 46,712 -- --
-------- -------- -------

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25

AS OF DECEMBER 31, 1999
----------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Stockholders' equity (deficiency):
Common Stock, $.001 par value; 30,000,000 shares
authorized, 5,548,180 shares issued and 3,771,680
shares outstanding, actual; 50,000,000 shares
authorized, 22,958,485 shares issued and
21,181,985 shares outstanding, pro forma;
50,000,000 shares authorized, 26,658,485 shares
issued and 24,881,985 shares outstanding pro
forma as adjusted................................ 6 23 27
Series A-1 Convertible Preferred Stock, $.001 par
value; 600,000 shares authorized, issued and
outstanding actual; 600,000 shares authorized, no
shares issued and outstanding pro forma; no
shares authorized, issued and outstanding pro
forma as adjusted................................ 1 -- --
Series A-2 Convertible Preferred Stock, $.001 par
value; 125,000 shares authorized, issued and
outstanding actual; 125,000 shares authorized, no
shares issued and outstanding pro forma; no
shares authorized, issued and outstanding pro
forma as adjusted................................ -- -- --
Additional paid-in capital............................ 8,987 63,183 100,030
Warrants.............................................. 995 995 995
Deferred financing costs.............................. (71) (71) (71)
Accumulated deficit................................... (14,658) (14,658) (14,658)
Deferred compensation................................. (4,334) (4,334) (4,334)
Note receivable from related party.................... (315) (315) (315)
Treasury stock........................................ (461) (461) (461)
-------- -------- -------
Total stockholders' equity (deficiency).......... (9,850) 44,362 81,213
-------- -------- -------
Total capitalization........................ $ 37,376 $ 44,876 $81,727
======== ======== =======

The outstanding share information is based on our shares outstanding as of
December 31, 1999. This information excludes:

- 3,508,077 shares of common stock issuable upon the exercise of stock
options outstanding as of February 28, 2000 at a weighted average
exercise price of $1.75 per share; and

- 150,709 shares of common stock issuable upon the exercise of warrants
outstanding as of February 28, 2000 at a weighted average exercise price
of $8.20 per share.

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DILUTION

The pro forma net tangible book value of Bolt as of December 31, 1999,
after giving effect to (1) our sale of 418,060 shares of our Series D
Convertible Preferred Stock for $17.94 per share on February 29, 2000, and (2)
the mandatory conversion of all of our outstanding preferred stock into a total
of 16,911,142 shares of common stock was $36.9 million or $1.74 per share of
common stock. Pro forma net tangible book value per share represents the amount
of total tangible assets less total liabilities, divided by the number of shares
of common stock outstanding. Assuming the sale by us of 3,700,000 shares of
common stock in this offering at an assumed initial public offering price of
$11.00 per share, our pro forma net tangible book value as of December 31, 1999
would have been $81.2 million, or $3.26 per share of common stock. This
represents an immediate increase in pro forma net tangible book value of $1.52
per share to our existing stockholders and an immediate dilution in pro forma
net tangible book value of $7.74 per share to new investors purchasing shares in
this offering. After this offering, the per share value of our tangible assets
after subtracting our liabilities will be $3.26, which is substantially lower
than the assumed price investors will pay in this offering. The following table
illustrates this dilution on a per share basis:

Assumed initial public offering price per share............. $11.00
Pro forma net tangible book value per share as of December
31, 1999............................................... $1.74
Increase per share attributable to new investors.......... 1.52
-------
Pro forma net tangible book value per share after this
offering.................................................. 3.26
------
Dilution per share to new investors......................... $ 7.74
======

The following table summarizes, as of December 31, 1999 on a pro forma
basis, the number of shares of stock purchased from us, the total consideration
paid to us and the average price per share paid by existing stockholders and by
new investors, based upon an assumed initial public offering price of $11.00 per
share for shares purchased in this offering, before deducting the estimated
underwriting discounts and commissions and estimated offering expenses. This
table illustrates that although investors purchasing common stock in this
offering will have contributed about 41.6% of the total consideration paid to us
for our outstanding common stock, they will only own about 14.9% of our
outstanding common stock.

SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ---------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------

Existing stockholders.... 21,181,985 85.1% $57,039,208 58.4% $ 2.69
New investors............ 3,700,000 14.9 40,700,000 41.6 11.00
---------- ----- ----------- -----
Total.......... 24,881,985 100.0% $97,739,208 100.0%
========== ===== =========== =====

These tables assume no exercise of any outstanding stock options or
warrants to purchase common stock. As of February 28, 2000, there were:

- 3,508,077 shares of common stock issuable upon the exercise of stock
options outstanding at a weighted average exercise price of $1.75 per
share; and

- 150,709 shares of common stock issuable upon the exercise of warrants
outstanding at a weighted average exercise price of $8.20 per share.

To the extent these options or warrants are exercised, there will be further
dilution to the new investors.

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27

SELECTED FINANCIAL DATA

The statement of operations data for the years ended December 31, 1997,
1998 and 1999 and the balance sheet data as of December 31, 1998 and 1999 have
been derived from our audited financial statements beginning on page F-1 of this
prospectus which have been audited by Deloitte & Touche LLP. The statement of
operations data for the period from August 15, 1996 (date of inception) through
December 31, 1996 and the balance sheet data as of December 31, 1996 and 1997
have been derived from our audited financial statements not included in this
prospectus. The historical results are not necessarily indicative of the
operating results to be expected in the future. The selected financial data
shown below should be read in conjunction with our financial statements and the
notes to those financial statements beginning on page F-1 and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
beginning on page 21 of this prospectus.

PERIOD FROM
AUGUST 15, 1996
(DATE OF INCEPTION)
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, ------------------------------------
1996 1997 1998 1999
------------------- ---- ---- ----
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Bolt revenues....................................... $ -- $ 32 $ 404 $ 4,362
Revenues related to the Girls On and custom
publishing divisions.............................. 19 446 2,281 38
---------- ---------- ---------- ----------
Total revenues............................. 19 478 2,685 4,400
---------- ---------- ---------- ----------
Costs and expenses:
Production and technology......................... 15 810 1,138 3,526
E-commerce........................................ -- -- -- 1,119
Sales and marketing............................... 1 287 630 9,084
General and administrative........................ 51 549 1,327 1,766
Depreciation and amortization..................... 4 25 75 536
Stock-based compensation.......................... -- -- -- 3,007
---------- ---------- ---------- ----------
Total costs and expenses................... 71 1,671 3,170 19,038
---------- ---------- ---------- ----------
Loss from operations................................ (52) (1,193) (485) (14,638)
Other income (expense):
Interest income................................... -- 42 7 418
Interest expense.................................. -- -- (60) (133)
Gain on sale of Girls On.......................... -- -- -- 1,436
---------- ---------- ---------- ----------
Net loss............................................ $ (52) $ (1,151) $ (538) $ (12,917)
========== ========== ========== ==========
Basic loss per share................................ $ (.01) $ (.21) $ (.10) $ (3.43)
========== ========== ========== ==========
Weighted average number of shares of common stock
outstanding....................................... 5,500,000 5,500,000 5,461,063 3,765,080
========== ========== ========== ==========

AS OF DECEMBER 31,
---------------------------------
1996 1997 1998 1999
---- ---- ---- ----
(IN THOUSANDS)

BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 10 $184 $ 194 $37,148
Working capital (deficiency)................................ (18) 128 (130) 32,606
Total assets................................................ 69 662 1,033 44,534
Capital lease obligations, less current portion............. -- -- 178 514
Redeemable convertible preferred stock...................... -- -- -- 46,712
Stockholders' equity (deficiency)........................... 20 395 (630) (9,850)

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and
results of operations of Bolt should be read in conjunction with "Selected
Financial Data" on page 20 and our financial statements and related notes
beginning on page F-1 of this prospectus. This discussion and analysis contains
forward-looking statements that involve risks, uncertainties and assumptions.
The actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including, but not
limited to, those set forth under "Risk Factors" beginning on page 6 and
elsewhere in this prospectus.

OVERVIEW

Our Web site, Bolt.com, is a leading online destination that targets 15 to
20 year old teens. Bolt, Inc. was originally incorporated as Concrete Media,
Inc. in August 1996. Our original business consisted of three divisions:

- our Bolt subsidiary, which provided online content and community created
by and focused toward teens;

- our "Girls On" division, which provided online entertainment and related
content written by and focused toward young women; and

- our custom publishing division, which provided Web site development
services to third party non-advertising customers.

We also provided, and continue to provide, custom publishing and production
services to our advertising customers in connection with advertising and product
presentation on Bolt.com.

In late 1998 and early 1999, Concrete Media was reorganized. On December
30, 1998, we sold our custom publishing division and on January 29, 1999, we
sold our Girls On division. Accordingly, the statement of operations data for
the periods presented reflect the business of Bolt together with the business of
the custom publishing division and the Girls On division until they were sold.
Included in our results of operations for the years ended December 31, 1997,
1998 and 1999 are the following revenues and expenses:

- $446,000 in revenues and $1,308,000 in expenses for the year ended
December 31, 1997, representing the results of our Girls On and custom
publishing divisions;

- $2,281,000 in revenues and $2,198,000 in expenses for the year ended
December 31, 1998, representing the results of our Girls On and custom
publishing divisions; and

- $38,000 of revenues and $25,000 of expenses for the year ended December
31, 1999, representing the results of our Girls On division prior to its
sale in January 1999.

As a result of this reorganization, we believe that our historical results of
operations are not indicative of our business and prospects in the future. In
addition, the results of operations of the business of Bolt excluding our former
custom publishing and Girls On divisions is not indicative of our business and
prospects going forward.

We have a limited operating history and our prospects are subject to the
risks, expenses and uncertainties frequently encountered by companies in the new
and rapidly evolving markets for Internet products and services. These risks
include the failure to further develop brand awareness, the rejection of
services provided to advertisers, strategic partners and vendors, as well as the
inability to increase the levels of traffic to our Web site.

We have continued to incur losses and negative cash flows from operations
since our inception. These losses have been funded primarily through the
issuance and sale of preferred equity securities. As of December 31, 1999, we
had an accumulated deficit of $14.7 million. We plan to continue to make
significant investments in marketing and technology to continue to build brand
awareness, drive traffic to our site and build our member base. In addition, we
plan to continue to incur costs in building new strategic alliances in an effort
to increase our brand recognition. As a result, we expect to incur significant
operating losses and negative cash flows from operations for the foreseeable
future.

REVENUES

We currently derive revenues from two sources: (1) advertising and
sponsorships and (2) e-commerce. We also intend to derive revenues in the near
future from the sale of market research data.

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29

Advertising and sponsorships. Advertising revenues consist primarily of
sales of banner advertisements and sponsorships. Advertising agreements are
generally short-term and provide that we will guarantee a minimum number of
impressions or page views to be delivered over a specified period of time for a
fixed fee. Advertising revenues are generally recognized ratably based on
impressions delivered over the period of the advertising contract. If a contract
guarantees a minimum number of impressions, we constantly monitor the number of
impressions delivered and adjust our revenue recognition model. If we determine
that the minimum number of impressions will not be met within the period of time
specified in the contract, we continue to run the advertisement on our site
until the guaranteed number of impressions is achieved. The amount of revenue
recognized is adjusted ratably as the impressions are delivered over the time
necessary for delivery of the remaining impressions. To date, we have not
entered into any agreements requiring us to refund to advertisers amounts paid
if the minimum number of impressions is not delivered in the contract period.

We recognize revenues from our teen expertise and relationship management
services. In November 1999, we entered into a 26-month agreement with AOL. Under
this agreement, AOL will pay the Company to manage AOL's branded teen message
boards and teen chat rooms and to develop and maintain the Bolt branded Web site
resident on the AOL service called aol.bolt.com.

Under this agreement, AOL is also providing marketing value to us. AOL
provides us brand exposure because we have established and we maintain a linked,
customized, user-generated content environment at aol.bolt.com. All teen-focused
message boards, chat rooms, and teen community areas within the AOL services are
Bolt branded -- "Powered by Bolt." AOL will also deliver to us a guaranteed
minimum number of impressions and key commerce placements throughout AOL and its
various sites (including ICQ, Spinner, WinAmp, CompuServe and Netscape).

In consideration for the marketing value, including the guaranteed minimum
number of impressions we will receive from AOL, we must pay AOL a fixed fee; 40%
of this fee is paid in cash and the remaining balance is offset against the
revenue we earn from AOL for the above services. Revenue is recognized based on
the level of the monthly management, development and maintenance services
provided in relation to the total services estimated to be provided over the
26-month term of the agreement. Non-cash barter revenue of approximately
$118,000 has been recognized for the year ended December 31, 1999. The total
cost of the guaranteed minimum number of impressions received will be amortized
ratably as the impressions are delivered.

We have the right to all revenues from any advertisements that we sell on
aol.bolt.com.

Sponsorship revenues are derived from contracts that generally range from
three-to-12 months in length. Sponsorship agreements typically provide for the
delivery of impressions and market research, as well as strategic placement of
advertisements in contextually relevant areas of our site and the design and
development of sites branded by both Bolt and the sponsor intended to enhance
the promotional objective of the advertiser. Sponsorship revenues are recognized
by us in the same manner that advertising revenues are recognized. Revenues from
production services provided to customers that advertise on our site are
recognized as earned over the life of the advertisement period.

E-commerce. E-commerce revenues are derived from three sources: the sale
of products directly to consumers from the Bolt Store, flat fees from companies
who sell their products through our site and transaction fees received from
companies who pay us based on products they sell from promotions and advertising
on our site.

Our members tell us what items they would like to see offered in the Bolt
Store, in effect shifting the model of traditional retailing from
promotion-based sales (a "push" model) to one where our members choose the
products they want to buy (a "pull" model). Currently, the Bolt Store offers
over 450 products, including apparel, technology, sporting gear and other items,
and we expect to significantly increase the number of products we offer over the
next year. Our users purchase products online and third-party fulfillment
sources drop-ship the product directly to the consumer. We take title to
inventory from the shipper; however, products generally are shipped the same day
the order is fulfilled resulting in our having little, if any, inventory. We are
responsible for the risk of cash collection and product returns from our
customers. As of December 31, 1999, we had no inventory. To date, e-commerce
product returns have been insignificant. E-commerce revenues represent the gross
sales price of the product sold from the Bolt Store and is recognized at the
time product is

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30

shipped. We expect that future e-commerce revenues will fluctuate from quarter
to quarter due to seasonal fluctuations in consumer purchasing patterns. We
expect that our e-commerce revenues, especially relating to the sale of
products, in the third and fourth quarter of a given year will generally be
higher than the first two quarters of the year due to the key back-to-school and
holiday selling seasons.

We also generate e-commerce revenues from store-in-store placements, or
slotting fees, where a vendor pays us a fee to place its branded "store" within
the Bolt Store. This fee is generally recognized over the term of the agreement.
If up-front production time to design and develop the store-in-store is
significant and separately contracted for, this portion is recognized upon the
completion of the work. The actual products we sell through the store-in-store
are generally recognized as product sales as above. We also generate transaction
fees based on the placements and sales of merchandise or services through either
a link on our site or where the transaction is processed and fulfilled by a
third party vendor. In these instances, Bolt does not bear any risk of delivery,
collection or returns. Generally, these fees are earned as products are sold,
customers are referred or certain milestones are met.

Market research. We collect data about our members' preferences both
directly, through member-generated profiles, poll responses and survey results,
as well as implicitly, through click-stream analysis, purchasing history, and
other site activity. We believe our ability to collect data and extract insights
about teens' preferences, in the form of market research reports, will be an
increasingly important source of revenues in the future. We are able to collect
this valuable information relating to the teen demographic group and provide it
to companies without compromising the actual identities of our members and
otherwise in a manner consistent with our privacy policy. Our members know and
appreciate this fact, and because of it they tend to be very forthcoming about
their likes, dislikes and opinions. To date, we have not recorded any market
research revenues; however, reports have been prepared and provided to
advertisers as a value-added service in connection with larger advertising
contracts.

Significant customers. Lids Corporation accounted for 11% of our total
revenues for the year ended December 31, 1999. Our custom publishing division,
which provided Web site development services to third party non-advertising
customers, accounted for a large portion of our total revenues prior to the sale
of this division in December 1998. Each of the following customers were custom
publishing customers. Bertlesmann Buch, AG accounted for 52% of our total
revenues in 1998. Overly Publishing Co. accounted for 15% of our total revenues
and Tripod, Inc. accounted for 10% of our total revenues in 1997. No other
single customer accounted for more than 10% of our total revenues during these
periods.

COSTS AND EXPENSES

Costs and expenses consist of production and technology expenses,
e-commerce expenses, sales and marketing expenses, general and administrative
expenses, depreciation and amortization expenses and stock-based compensation.

Production and technology. Production and technology expenses primarily
include personnel costs related to technical operations, design activities,
productions of the various channels and member-tools incorporated in our site,
and the ongoing development and maintenance of our Web site.

E-commerce. E-commerce expenses primarily include merchandising personnel
costs and the actual costs of product purchased by us from our vendors.

Sales and marketing. Sales and marketing expenses consist primarily of the
costs of online distribution agreements, the costs of offline promotions and
advertising, personnel-related costs and public relations costs. Online
distribution agreements generally require a fixed monthly or quarterly fee paid
by us in exchange for a guaranteed minimum number of impressions. The fixed fee
is amortized as the guaranteed number of impressions is achieved. We expect to
incur significant costs over the next twelve months in an effort to generate
user traffic through the Bolt Store, including the issuance of store coupons and
other marketing strategies.

General and administrative. General and administrative costs primarily
relate to personnel related costs, professional fees and facility costs.

Depreciation and amortization. Depreciation and amortization expenses
relate to computer equipment and fixtures owned by us and the related
amortization of assets acquired through capital leases.

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31

Stock-based compensation. We have recorded total deferred stock-based
compensation of $4.3 million as of December 31, 1999 in connection with stock
options granted during 1999. The deferred stock-based compensation amount
represents the difference between the exercise price of stock option grants and
the deemed fair value of our common stock on the date of grant. These amounts
are amortized over the vesting periods of the applicable agreements, resulting
in amortization of stock-based compensation totaling $3.0 million for the year
ended December 31, 1999. The amortization expense relates to options awarded to
employees in all operating expense categories. Deferred stock-based compensation
that will be subsequently amortized as expense for each of the next four fiscal
years, including options granted through February 28, 2000, is estimated to be
as follows:

PERIOD AMOUNT
- ------ --------------
(IN THOUSANDS)

Year ending December 31, 2000............................... $ 5,405
Year ending December 31, 2001............................... 2,409
Year ending December 31, 2002............................... 1,095
Year ending December 31, 2003............................... 253
-------
Total............................................. $ 9,162
=======

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

Total revenues. Total revenues increased to $4.4 million for the year
ended December 31, 1999 from $2.7 million for the year ended December 31, 1998.
For the year ended December 31, 1999, revenues of about $3.5 million were
related to advertising and sponsorship and revenues of about $860,000 were
related to e-commerce resulting from the launch of the Bolt Store in September
1999. During the year ended December 31, 1998, we recognized $2.0 million of
revenues related to the custom publishing division, which was sold on December
30, 1998, of which 71% came from one customer. Excluding the revenues from the
custom publishing and Girls On divisions, our revenues increased to $4.4 million
for the year ended December 31, 1999 from $404,000 for 1998. This increase was
due to advertising and sponsorship revenues primarily due to a larger customer
base and from e-commerce revenues. In 1999, one customer accounted for 11% of
our total revenues.

Production and technology expenses. Production and technology expenses
increased to $3.5 million for the year ended December 31, 1999 from $1.1 million
for the year ended December 31, 1998. This increase was primarily due to
significant increases in staff and the related personnel costs associated
therewith. In addition, we incurred expenses of about $794,000 in external
production and technology costs related to consultants. Excluding expenses from
the custom publishing and Girls On divisions, our production and technology
expenses increased to $3.5 million for the year ended December 31, 1999 from
$336,000 for the year ended December 31, 1998. This increase was the result of
the growth of the Bolt business, specifically related to salary and other
personnel costs and the external consulting costs noted above.

E-commerce expenses. E-commerce expenses of $1.1 million related to the
launch of the Bolt Store were incurred in the year ended December 31, 1999. We
did not operate an e-commerce business in 1998.

Sales and marketing expenses. Sales and marketing expenses increased to
$9.1 million for the year ended December 31, 1999 from $630,000 for the year
ended December 31, 1998. Included in this increase was about $2.3 million
related to online advertisements placed with various Web sites, about $813,000
of television and print advertising expenses, and about $3.7 million of
personnel and other miscellaneous costs, including marketing costs related to
the launch of the Bolt Store. In addition, during 1999, we incurred $1.7 million
of costs related to online distribution agreements with major Internet
companies, pursuant to which we pay flat fees, transaction fees or fees for a
number of impressions over a period of time. Excluding expenses from the custom
publishing and Girls On divisions, our sales and marketing expenses increased to
$9.1 million from $332,000 for the year ended December 31, 1998. This increase
was primarily the result of the same increases in personnel, online, television
and print advertising expenses described above and marketing expenses related to
the launch of the Bolt Store.

General and administrative expenses. General and administrative expenses
increased to $1.8 million for the year ended December 31, 1999 from $1.3 million
for the year ended December 31, 1998. This increase was

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32

due to increased administrative staffing to support our growth. Prior to the
sale of the custom publishing division and Girls On division, salary expenses
related to general and administrative departments such as executive, finance and
human resources were combined and not captured as direct expenses related to any
one division. These costs have been allocated between Bolt and the custom
publishing and Girls On divisions based on the overall headcount by department
where direct expenses were identifiable by division. Excluding expenses from the
custom publishing and Girls On divisions, our general and administrative
expenses increased to $1.7 million from $289,000 for the year ended December 31,
1998. This increase was directly related to the growth of the Bolt business.

Depreciation and amortization expenses. Depreciation and amortization
expenses increased to $536,000 for the year ended December 31, 1999 from $75,000
for the year ended December 31, 1998. This increase was primarily the result of
the addition of $3.0 million of equipment and software necessary for the launch
of the Bolt Store and the expansion of our infrastructure.

Stock-based compensation expenses. Stock-based compensation expenses of
$3.0 million for the year ended December 31, 1999 represent the difference
between employee stock option grant prices and the deemed fair market values on
the date of grant amortized over the vesting period of the options. At December
31, 1999, we had recorded $4.3 million of deferred stock-based compensation,
which will be amortized over the vesting periods of the options, generally four
years.

Other income and expense. Other income and expense consists of interest
income of about $418,000 earned on cash equivalents and notes receivable, offset
by interest expense of about $133,000 on capital leases, short-term debt and
notes payable. For the year ended December 31, 1999, we recorded a $1.4 million
gain on the sale of Girls On, representing our contractual portion of the net
proceeds from the acquirer of the Girls On property.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

Total revenues. Total revenues increased to $2.7 million for the year
ended December 31, 1998 from $478,000 for the year ended December 31, 1997. The
increase was primarily related to revenues of $2.0 million from our custom
publishing division, which was sold on December 30, 1998. For the year ended
December 31, 1998, 52% of our total revenues came from one customer. Excluding
the revenues from the custom publishing and Girls On divisions, our revenues
increased to $404,000 for the year ended December 31, 1998 from $32,000 for the
same period in 1997. This increase was the result of a larger advertising and
sponsorship customer base.

Production and technology expenses. Production and technology expenses
increased to $1.1 million for the year ended December 31, 1998 from $810,000 for
the year ended December 31, 1997. The increase was primarily due to the addition
of production and technology staff and related personnel costs.

Sales and marketing expenses. Sales and marketing expenses increased to
$630,000 for the year ended December 31, 1998 from $287,000 for the year ended
December 31, 1997. This increase was due to an increase in staff and the related
personnel costs as well as an increase in online distribution costs in 1998.

General and administrative expenses. General and administrative expenses
increased to $1.3 million for the year ended December 31, 1998 from $549,000 for
the year ended December 31, 1997. The increase was due to increased
administrative staffing to support our growth.

Depreciation and amortization expenses. Depreciation and amortization
expenses increased to $75,000 for the year ended December 31, 1998 from $25,000
for the year ended December 31, 1997. The increase was primarily due to the
expansion of our infrastructure to support increases in personnel and the growth
of the business.

Other income and expense. We recorded interest income of $7,000 for the
year ended December 31, 1998 related to interest on short-term investments,
compared to $42,000 for the year ended December 31, 1997. Interest expense for
the year ended December 31, 1998 was $60,000 related to a short-term convertible
note payable and capital lease obligations.

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SELECTED UNAUDITED QUARTERLY REVENUES

The following summary sets forth our quarterly revenues for Bolt, which
include advertising, sponsorship and e-commerce revenues. The information for
each of these quarters has been prepared on substantially the same basis as the
audited financial statements included elsewhere in this prospectus, and in the
opinion of management, includes all adjustments necessary for a fair
presentation of the results of operations for such periods. These results are
not necessarily indicative of the results to be expected in the future, and the
results of interim periods are not necessarily indicative of results for the
entire year.

QUARTERLY REVENUES
FOR THE QUARTER ENDED
---------------------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31,
1998 1998 1998 1998 1999 1999 1999 1999
-------- -------- --------- -------- -------- -------- --------- --------
(IN THOUSANDS)

Bolt revenues (advertising,
sponsorships and
e-commerce)................... $5 $39 $141 $219 $272 $692 $921 $2,477

The significant increase in revenues for the three months ended June 30,
1999 and for the three months ended September 30, 1999 was in part due to an
increase in revenues from two new advertisers during these periods as well as to
a general increase in our advertiser base as we increased our sales force. The
significant increase for the three months ended December 31, 1999 was also due
to an overall increase in the number of advertising customers as well as about
$845,000 of e-commerce revenues from the Bolt Store which was launched in
September 1999.

Our revenues and operating results are likely to vary significantly from
quarter to quarter in the future due to a number of factors, many of which are
beyond our control. These factors include:

- the ability to attract and retain new members, customers and
advertisers;

- new sites, services or products introduced by us or our competitors;

- the timing and uncertainty of sales cycles;

- the mix of online advertisements sold;

- seasonal weakness in advertising sales, which typically occurs in the
first and third quarters;

- the level of Web and online services usage;

- the ability to attract, integrate and retain qualified personnel;

- technical difficulties or system downtime affecting the Internet
generally or the operation of our business; and

- general economic conditions as well as economic conditions specific to
Internet companies.

Our revenues for the foreseeable future will be substantially dependent on
advertising and sponsorships, many of which are short term and subject to
cancellation without penalty until shortly before publication. In addition, we
derive a significant portion of our revenues from sales of advertising to a
limited number of customers. Accordingly, the loss of any advertising
relationship, or the cancellation or deferral of advertising orders could harm
our results in any one quarter. As a result of these and other factors,
quarter-to-quarter comparisons of our operating results should not be relied
upon as an indication of future performance.

LIQUIDITY AND CAPITAL RESOURCES

We have funded our operations to date primarily through private sales of
securities, which resulted in aggregate net proceeds of about $48.7 million from
our inception through December 31, 1999. We had about $37.1 million of cash and
cash equivalents as of December 31, 1999 as compared to $194,326 as of December
31, 1998. The increase in cash is primarily due to the $8.0 million raised
through the sale of our Series B preferred stock, $38.7 million raised through
the sale of our Series C preferred stock and an increase in other financing
activities of $500,000, offset by cash used in operating and investing
activities of $7.7 million and $2.6 million, respectively.

Net cash used in operating activities for the year ended December 31, 1999
increased to $7.7 million from $348,000 in 1998. This increase was primarily the
result of the $13.0 million net loss for the year ended December 31, 1999.
Included in the net loss for the year ended December 31, 1999 was a $1.4 million
gain on the sale of Girls On and an increase in non-cash depreciation,
amortization and stock-based compensation

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expenses totaling $3.6 million. In addition, we recorded a net increase in cash
resulting from the net changes in operating assets and liabilities of about $2.9
million for the year ended December 31, 1999 compared to 1998. Net cash used in
operating activities decreased to $348,000 in 1998 from $1.1 million in 1997,
primarily due to the reduction in the net loss from $1.2 million in 1997 to
$538,220 in 1998.

Net cash used in investing activities increased to $2.6 million for the
year ended December 31, 1999 from $65,000 in 1998. This increase was the result
of $3.0 million of capital expenditures, primarily equipment and software,
partially offset by $386,000 in cash proceeds received from the sale of Girls
On. Capital expenditures were $229,000, $65,000 and $3.0 million for the years
ended 1997, 1998 and 1999, respectively.

Net cash provided by financing activities for the year ended December 31,
1999 increased to $47.3 million from $423,000 in 1998. Of this increase, about
$38.7 million of net proceeds were received through the sale of Series C
preferred stock, $8.0 million of net proceeds were received through the sale of
Series B preferred stock, $651,022 was received from Lighthouse Capital Partners
III, L.P. as proceeds from the sale of equipment previously purchased by us,
which is now being leased pursuant to a lease financing and revolving loan
security agreement that we entered into with Lighthouse on August 23, 1999, and
$500,000 of short-term borrowings was received under a loan and security
agreement we entered into with Lighthouse in August 1999. In December 1999, we
paid this loan in full. Net cash provided by financing activities decreased to
$423,000 in 1998 from $1.5 million in 1997 due to the $1.5 million of proceeds
received from the sale of Series A preferred stock in 1997, partially offset by
the proceeds received in 1998 from a convertible note of $500,000.

During November and December 1999, we completed the sale of 3,787,801
shares of Series C preferred stock, resulting in net proceeds of about $38.7
million, after expenses. On February 29, 2000, we completed the sale of 418,060
shares of Series D preferred stock, resulting in proceeds of about $7.5 million.
We expect to use these proceeds to help fund our expected investment in
strategically targeted online and offline marketing, to build brand awareness
and drive additional traffic to our Web site. In addition, we plan to increase
capital expenditures, primarily technical equipment and software, to
significantly increase our marketing expenses and to increase our staff and
infrastructure over the next several months.

Our lease financing agreement with Lighthouse provides a lease line not to
exceed $1,000,000 to fund eligible equipment purchases with an option to
increase the line by $500,000. As of December 31, 1999, we had outstanding
borrowings under the line of $598,529, bearing interest at 8%. In addition to
the lease line, we entered into a loan and security agreement with Lighthouse.
The agreement allows us to borrow up to $500,000 against certain eligible
receivables at an interest rate of prime plus 1%. As of December 31, 1999, we
had no outstanding borrowings under this agreement. As additional consideration
for these agreements, we have issued to Lighthouse a warrant to purchase 1,975
shares of Series B-3 preferred stock at an exercise price of $30.37 per share.

We expect that the net proceeds from this offering and the proceeds
received from the sale of the Series C and Series D preferred stock, together
with our available funds, will be sufficient to meet our operating and capital
needs for the next 12 months, although there can be no assurance that we will
not have additional capital needs prior to that time. If cash generated from our
operations is insufficient to satisfy our business requirements, we may seek
additional funding through public or private financings or other arrangements.
Adequate funds may not be available when needed or may not be available on
favorable terms. If additional funds are raised through the issuance of equity
securities, dilution to existing stockholders may result. If insufficient funds
are available, we may be unable to enhance brand awareness or to make capital
expenditures necessary to support our business, either of which could seriously
harm our business.

YEAR 2000 COMPLIANCE

The "Year 2000" issue arose because many computer programs use only the
last two digits to refer to a year. Therefore, these computer programs may
recognize a year that ends in "00" as 1900 rather than 2000. As a result,
computer systems and software used by many companies and governmental agencies
needed to be upgraded to comply with Year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.

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In the fourth quarter of 1999, we completed an assessment of the Year 2000
readiness of our operating, financial and administrative systems, including the
hardware and software that support our systems. Our assessment plan consisted of
the following steps:

- quality assurance testing of our internally developed proprietary
software;

- contacting or researching readiness statements of our third-party
vendors and licensors of material hardware, software and services that
are both directly and indirectly related to the delivery of our services
to our users;

- contacting or researching readiness statements of our vendors of
third-party systems;

- contacting or researching readiness statements of our Infrastructure
vendors;

- assessing repair or replacement requirements;

- repair and replacement;

- implementation of the plan; and

- creation of contingency plans in the event of Year 2000 failures. This
plan included the backup of all mission critical systems immediately
prior to the New Year.

Prior to January 1, 2000, we replaced systems or modified code where
necessary. Our vendors of material hardware and software components,
infrastructure, and systems indicated that the products we use are Year 2000
compliant. We have not experienced any significant problems related to the Year
2000 issue. We therefore believe that our principal information systems
correctly define the Year 2000.

To date, our costs associated with Year 2000 compliance have not exceeded
$50,000, and we do not anticipate that Year 2000 expenses will be material going
forward.

RECENT ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1998, we adopted SFAS No. 131, "Disclosure About
Segments of an Enterprise and Related Information." SFAS No. 131 establishes
standards for the way business enterprises report information about operating
segments, as well as enterprise-wide disclosures about products and services,
geographic areas and major customers. We operate in one segment in the United
States.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. Generally, it
requires than an entity recognize all derivatives as either an asset or
liability and measure those instruments at fair value, as well as identify the
conditions for which a derivative may be specifically designed as a hedge. SFAS
No. 133 is effective for fiscal years beginning after June 15, 2000. We do not
currently engage or plan to engage in any derivative or hedging activities.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." This statement requires
companies to capitalize qualifying computer software costs which are incurred
during the application development stage and amortize them over the software's
estimated useful life. SOP 98-1 is effective for fiscal years beginning after
December 15, 1998. We adopted the requirements of SOP 98-1 as of January 1,
1999.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We maintain our cash equivalents in a money market fund. As of December 31,
1999, all of our cash equivalent investments will mature in three months or less
(see note 2 to the notes to our financial statements). Bolt did not hold any
derivative financial instruments as of December 31, 1999, and has never held
such investments. Due to the short term nature of our investments, we believe we
have no material exposure to interest rate risk arising from our investments.
Therefore, no quantitative tabular disclosure is required.

Currently, all of our revenues and expenses are denominated in U.S. dollars
and as a result, we have not had any exposure to foreign currency rate
fluctuations.

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BUSINESS

OUR BUSINESS

Our Web site, Bolt.com, is a leading online destination that targets 15 to
20 year old teens. According to our database, our member base has grown to more
than 1.9 million as of February 29, 2000 from about 340,000 as of December 1,
1998. According to Media Metrix, in December 1999, Bolt.com was the "stickiest"
site for 12 to 17 years old Internet users of all the sites on the Internet, as
measured by minutes per user per month. According to Nielsen I/PRO, we had over
196 million page views and over 6.6 million user sessions in January 2000 as
compared to 28 million page views and 1.4 million user sessions in December
1998. By comparison, Seventeen magazine, a leading teen-focused magazine which
has been in existence since 1944, has a circulation of about 2.4 million.

Based on the following factors, we believe that we will be able to grow our
business in a rapid and cost efficient manner:

- Global demographic: globally, teens share many interests and needs,
which should allow us to readily expand on an international basis.

- Member-generated content: substantially all of our content is generated
by our members, minimizing the need for us to hire additional staff or
pay third parties to generate additional content.

- Critical mass: as one of the first entrants in this market, we have
developed a large and loyal member base, which we believe is an
important asset to continue our growth.

We believe we have created a leading online teen destination and generated
one of the largest databases of teen opinions and preferences in the world. With
Bolt.com, we generate revenues through:

- fees from the sale of advertising and sponsorships on our site,
including fees paid for our expertise in managing other companies'
relationships with teens;

- e-commerce sales through our recently opened online Bolt Store; and

- transactional fees paid by other retailers and e-commerce companies that
promote their products and services on our site.

In the future, we expect to generate revenues through market research fees from
companies that are interested in learning more about our highly-targeted teen
audience.

INDUSTRY BACKGROUND

GROWTH OF THE INTERNET, E-COMMERCE AND ONLINE ADVERTISING

The Internet has emerged as a significant global communications medium,
enabling millions of people to share information, communicate and conduct
business electronically. Both the number of Internet users and the amount of
time they spend online are growing. This growth is the result of a number of
factors, including:

- an increase in the number of computers in the home, schools and
workplace;

- improvements in computer network infrastructure;

- more convenient, faster and less expensive Internet access;

- advances in computer and modem technology;

- an increase in public awareness of the benefits of using the Internet;
and

- the development of easy-to-use interfaces.

The rapid adoption of the Internet represents a significant opportunity for
businesses to market and sell products and services online and for advertisers
and businesses to capitalize on the Internet's interactive nature

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by marketing their products to highly targeted audiences. The success of
Internet advertising can be attributed to the following factors:

- Internet advertising offers advertisers a flexible way to target their
messages and measure their results;

- Internet advertisers can tailor their messages to specific groups of
consumers;

- Internet advertisers can change advertising content frequently in
response to market factors, current events and consumer feedback; and

- Advertisers can more accurately track the effectiveness of their
advertising messages based on the rate at which consumers directly
respond to their advertisements through "click-throughs" that their
advertisements receive.

GROWTH OF TARGETED ONLINE CONTENT AND COMMUNITY SITES

As the Internet has grown, users and advertisers have started seeking more
targeted and compelling content, information, expression and interaction. Just
as cable television channels, such as MTV and ESPN, have become more popular by
aggregating content targeted towards a specific audience, online content and
community sites that provide a demographically targeted environment have
emerged. Like the major television networks that provide programming across many
demographic segments, the major online portals typically provide a broad range
of content and services without a specific demographic focus.

Targeted online communities provide users with the ability to access
relevant content and to interact directly with other people with similar
interests. Registered users, or members, are often eligible for additional
services from a site, such as customization options or access to premium
content. As a site learns more about its members as they register and spend more
time online, it can tailor its features to meet the needs and preferences of its
users and members. This information also provides advertisers and merchants with
more focused demographic and psychographic information that can be used to
maximize direct marketing opportunities.

TEENS ARE BECOMING AN INCREASINGLY IMPORTANT AUDIENCE TO ONLINE ADVERTISERS
AND MERCHANTS

Significant advertising opportunities exist on a teen-focused Web site.
Teens are more difficult than adults to reach with targeted advertising because
teens generally do not subscribe to magazines in large numbers, and they tend to
watch less television and lead more active lifestyles than adults. While teens
are flooded with literally thousands of broad-based marketing messages every day
from other traditional sources, such as billboard and radio advertising, we
believe they are largely unreceptive to advertising messages that are not
personally relevant. We believe that marketing products and services to teens
online through a site with contextual, editorial information focused on them is
more effective than using traditional marketing methods.

The United States Census Bureau projects that the number of individuals
between the ages of 10 and 24 will grow to 63.1 million in 2010. This growth
rate is estimated to outpace growth of the general population by nearly 10%. In
addition, teens also possess substantial disposable income. Based on third-party
market research data, we believe that over $109 billion is spent annually by
teens in the United States alone.

Teens are often early adopters of new technologies and are significantly
involved with the Internet. Based on third-party market research data, we
believe that about 57% of 13 to 17 year olds use the Internet regularly, as
compared to about 36% of 18 to 34 year olds, 31% of 35 to 54 year olds and 17%
of individuals over the age of 55. Based on this data, we also believe that the
number of 13 to 17 year olds who regularly access the Internet will rise to 12.4
million by 2000 from 9.1 million in 1998, an increase of over 36% and that 13 to
17 year olds currently spend an average of 8.5 hours online per week as compared
to 6.7 hours for individuals over the age of 18. Most online commerce
transactions, including all cash transactions currently completed through the
Bolt Store, are credit card transactions. Based on third-party market research
data and other publicly available information, Bolt estimates that about 10% of
12 to 19 year olds have access to a parent's credit card and that more than 30%
of 18 to 19 year olds have their own credit card. This creates a significant
opportunity to both sell products and advertise to teens online. Based on
third-party market research data, we estimate that online commerce sales to 13
to 17 year olds will increase to $1.4 billion in 2002 from $161 million in 1999.

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THE NEED FOR A RELEVANT INTERACTIVE FORUM FOR TEENS

We believe that teens have a desire to express themselves when dealing with
issues and problems affecting their lives, but they are often unable or
unwilling to talk about these issues with adults or discuss them face to face
with their friends. Accordingly, they require an interactive forum that will
fill the need that teens have to anonymously express their ideas and opinions
about teen-related issues to their peers. While traditional media is not suited
to meet this need because it is not interactive, the Internet is particularly
appropriate because it is currently the only mass medium that allows for
real-time interactive communication. Accordingly, there appear to be substantial
market opportunities for an online forum that combines content and community
that is relevant to the lives of teens. The major Internet portals, however,
have not seized this opportunity for the following reasons:

- Most portals are generally not contextually relevant. These sites are
designed to appeal to a broad audience, and therefore, we believe they
have not created an environment that is contextually relevant to teens'
needs and buying habits;

- Major portals do not effectively address teen issues. We believe they
do not effectively address the issues that are relevant to teens, such
as peer, parental and school-related pressures, and issues revolving
around friendship, relationships, sexuality and development; and

- Major portals do not provide teen-relevant interactive services. We
believe the major portals do not provide the kind of targeted
interactivity and services that teens seek.

THE BOLT SOLUTION

Bolt.com is one of the most well-known and widely visited Web sites for
teens on the Internet. We provide a site where teens can congregate in an
environment that caters exclusively to their interests and promotes their
participation and recognition. With Bolt.com, we generate revenues from
advertising and sponsorship sales and e-commerce transactions, and we expect to
generate revenues from market research fees in the future.

WHY TEENS USE BOLT

We empower our members. Bolt.com is a site that empowers our teen-focused
audience to express opinions and ideas regarding the ever-changing issues and
trends that impact their lives. Our members communicate on our site and provide
content for our site using their chosen Bolt Member IDs. This ensures anonymity
and encourages frank and open discussion. Our members provide most of the
content of Bolt.com, unlike other sites where the non-teen staff or third
parties generate most of the content. We have created a process where our
members are, in effect, a collection of hundreds of thousands of
"freelance-writers" from around the world who continually contribute content
such as news reports, music and movie reviews, product reviews and survey
questions and answers. Our producers then gather, edit and filter these
submissions and feature items that ultimately provide Bolt.com with its content.
Accordingly, we do not generate content based on what we believe our audience is
interested in; rather, we let our teen audience direct our content. Our members
provide the content, and we provide the processes, framework, tools, utilities,
and applications that empower teens around the world to have a voice regarding
what is important in their lives.

We provide personalized tools. Our more than 1.9 million members can use
our personalized proprietary tools to help them manage their lives, making the
site more valuable to them the more they use it. Through tools such as our Bolt
Notes and Diaries, User Profiles and a Personal Calendar our members can
personalize our site. In addition, consistent with our privacy policy, we gather
data concerning the preferences and dislikes of our members, which should allow
our site to be continually relevant to them. This data can be used to target
content as well as advertising information toward particular members, while
maintaining the confidentiality of our members. We believe our registered member
base creates member loyalty and leads to repeat site visits, referrals and
higher quality member-generated content.

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We offer member-directed online shopping. In September 1999, we launched
the online Bolt Store, which offers products that our members have told us they
want to buy. We allow our more than 1.9 million members to help create the Bolt
Store by asking them, through surveys, polls and other interactive tools, which
products they would like to buy. We then offer these items for sale and use
third-party fulfillment sources to drop-ship products that are purchased at the
Bolt Store. Currently, the Bolt Store offers over 1,000 products, including
apparel, technology, sporting gear and other items.

WHY MARKETERS ADVERTISE ON BOLT.COM

We have developed a site that we believe is highly desirable to advertisers
and have established relationships with over 150 new advertisers over the past
year. We believe we have developed an attractive platform for advertisers for
the following reasons:

- Audience. We provide a highly-targeted, growing and
demographically-focused audience.

- Size. We have a large and active teen member base, as demonstrated by
the over 196 million page views and over 6.6 million user sessions in
January 2000.

- Contextual Relevance and Targeting. Marketers can target their messages
in a way that is particularly relevant to our members' interests.

- Member Loyalty. According to Media Metrix, in December 1999, Bolt.com
was the "stickiest" site for 12 to 17 year old Internet users of all
sites on the Internet, as measured by minutes per user per month.

We offer advertisers a variety of advertising and sponsorship opportunities
to allow them to take advantage of these factors, including:

- Banner advertisements;

- Integrated content sponsorships;

- Pop-up advertisements;

- Section sponsorships;

- A rotating "viewer window";

- HTML-based and text-based advertisements in targeted emails; and

- Opt-in registration boxes, that allow members to request information
from selected advertisers.

Because of the substantial amount of data we collect on individual members,
advertisers are able to purchase highly-targeted advertisements that
specifically address their marketing needs. For example, if an advertiser wishes
to reach only 18 year-old men in urban areas who have indicated that they like
snowboarding, we can deliver a marketing message specifically to those members.
While this is efficient for our advertisers, it is also relevant to our members,
who are seeking messages or advertising that specifically address their needs
and do not want to be inundated with advertising messages not relevant to their
particular interests. We plan to continue this advertising methodology in an
effort to become a leader in one-to-one marketing. During the past year, we have
also focused on offering our members the ability to select specific advertisers
from whom they wish to receive more information.

In addition, while banner advertisements are the accepted advertising
method for many advertising agencies, advertisers are realizing that the
Internet provides an excellent opportunity to add more value to the user
experience through integrated sponsorships. For example, Neutrogena sponsors an
interactive question and answer section on Bolt.com where content focused on
health and beauty tips is integrated with Neutrogena's advertisements.

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PROVIDING VALUABLE DATA ON THE TEEN DEMOGRAPHIC

The data and information we gather about our highly-focused audience can be
extremely valuable to companies that wish to target this demographic group. We
have created a proprietary environment that not only provides a compelling
online experience for teens, but also generates a tremendous amount of data
about our members. We collect this data both explicitly, through
member-generated profiles, poll responses and survey results, and implicitly,
through click-stream analysis, purchasing history and other site activity. We
are able to provide valuable information relating to our specific demographic
group to advertisers without compromising the actual identities of our members.
Our members know and appreciate this fact, and because of it they are very
forthcoming about their likes, dislikes and opinions.

We believe our ability to collect data and extract insights about teens'
preferences in the form of market research reports to companies will generate
additional revenues in the future. We also are currently selling the ability to
survey our audience through a member "opt-in" program on the site, and we are
significantly ramping-up our data-mining capabilities to provide a unique
service to those wishing to collect market research on this unique and elusive
demographic.

THE BOLT STRATEGY

Our goal is to be the leading media company focusing on teens. We intend to
achieve this goal by pursuing the following strategies:

CONTINUE TO BUILD BRAND AWARENESS. We believe that continuing to build
brand awareness for our site is critical to attracting and expanding our global
member base and customer loyalty. Our strategy is to enhance the recognition of
the Bolt brand among our members, other users, customers and strategic partners
through:

- Traditional and Internet Advertising. We will continue to use
traditional advertising, which may include print, television and radio,
not only to continue to reach more advertising customers but also to
publicize our brand to potential users. Also, we will use targeted
online advertising on other Web sites, like Yahoo! or MSN, to promote
our brand name to existing and potential members.

- Non-Traditional Events. We will continue to promote our brand at events
such as rock concerts, sporting events, and other events where teens
gather. For example, in the summer of 1999, we conducted the "Power
Trip," in which a Bolt-branded trailer traveled to over 50 events to
encourage teens to discuss teen empowerment in their own communities.
Tens of thousands of teens registered for our site through this event.

CONTINUE TO DEVELOP AND EXTEND OUR RELATIONSHIPS WITH STRATEGIC PARTNERS
AND ADVERTISERS. We intend to enhance our brand name and increase our customer
base by expanding the number and type of strategic alliances and advertising
relationships we have with online service providers and portals like America
Online, MSN Hotmail, Yahoo! and Lycos, as well as traditional media outlets and
retailers. In addition, we intend to strengthen our relationships with
advertisers by providing more targeted advertising and sponsorship opportunities
to our partners. We also intend to invest in additional reporting tools to
provide unparalleled service in tracking results of promotional and advertising
campaigns on the site.

ENHANCE OUR ONLINE FEATURES. We will continue to develop our content,
community and e-commerce product offerings to drive teen traffic to our Web
site. We are always looking for innovative and exciting interactive tools and
new technologies to enhance our users' experience. For instance, we intend to
develop the ability to access many of the features and functionality found on
Bolt.com by as many electronic means as possible, including wireless phones and
pagers.

EXPAND OUR E-COMMERCE OFFERINGS. We intend to continue to make e-commerce
an integrated and valuable part of our Web site. The Bolt Store currently offers
over 450 products for both men and women, and we intend to significantly
increase the number of products we offer over the next year. In addition, we
plan to integrate global shopping opportunities into the Bolt Store for our
users outside of the United States who seek access to American products.

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DEVELOP A CO-BRANDED DEBIT CARD. We are planning to develop, with a
strategic partner, the Bolt Card, a co-branded financial resource for teens that
will not only provide them with a non-credit based means of conducting
transactions at the Bolt Store but will also allow them to make purchases
outside of the Bolt Store.

EXPAND OUR INTERNATIONAL PRESENCE. We believe teens throughout the world
share similar interests and face similar issues and problems. Therefore, we plan
to launch localized versions of our Web site in strategic locations throughout
the world, focusing on countries that have large teen populations with a
significant Internet presence. Initially, we intend to target countries such as
the United Kingdom, France, Germany, Japan, Italy, and Mexico. We plan to
develop local sales staffs and create hosting operations, but intend to leverage
our domestic production facility to maintain economies of scale as we focus on
additional countries.

OUR WEB SITE

The following table details some of the functions and tools we currently
offer on Bolt.com:

SERVICE/FUNCTION DESCRIPTION

Member ID/Profile............. Each member chooses a Bolt member name and all
communica tions on our site are accomplished
using that name to ensure anonymity among our
members. Our members are encouraged not to give
their real names to other members. The member
profile contains a member's basic information
including age, sex, birthday, state, country if
outside the U.S., and preferences. This is the
basis for our database profile of each member,
and provides members, as well as our
advertising, commerce, and market research
clients, with core data about the likes and
interests of each member without disclosing any
confidential personal information about the
member.

BoltEverywhere................ Allows our members to access, free of charge,
proprietary Bolt applications, including Bolt
Notes, Tagbooks, Bolt Polls and other
personalized content via wireless services.

Tagbooks...................... Allows individual members to create personal
questions and polls within their Member
Profiles. In order to access the Tagbooks of a
member and answer questions or leave messages,
you must access that member's profile. This has
become one of the most popular features of
Bolt.com. In addition, because only members can
create Tagbooks, we have found that this
feature drives member registration.

Bolt Notes.................... Allows members to leave a message for any Bolt
member using a proprietary application that
combines instant messaging capabilities with
email.

Bolt Boards................... Provides members with a forum to discuss almost
any topic with each other on the Boards,
ranging from Pro Wrestling to Alternative
Religions. Bolt Boards are the main message
boards on Bolt.com.

Bolt Store Product Reviews.... Allows our members to comment on products for
sale in or that they have purchased in the Bolt
Store. This provides teens with peer-generated
information to support their decision making
for product purchasing.

Bolt Email and Voicemail
Service....................... Provides every member with access to Internet
email through the Bolt.com address and also
provides a free, private voicemail number.
Currently, over 870,000 of our more than 1.9
million members have elected to subscribe to
this service.

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Bolt Homepages................ Allows members to categorize and create their
own Web pages that we host free of charge.

Polls......................... Allows our members to suggest poll topics.
These poll topics are reviewed by our producers
and highlighted in relevant channels where
other members can respond to the poll
questions. A member who responds to a poll
question gets immediate feedback on how other
members have responded.

Friends....................... Enables members to generate listings of other
Bolt members that the member chooses. When
members access our site, they are told which of
their Friends are also on the site. This
facilitates online communication for our
members.

Member Search................. Provides members with the capability to find
and contact other members with similar likes
and/or dislikes.

Personal Calendar............. This Web-based calendar allows members to set
up reminders and appointments, including times
to meet with friends online.

Chat.......................... Provides real-time communication in "rooms"
with specific topics, such as movies, music,
style and religion. Also includes rooms for
French, German, Dutch and Spanish speakers.

Bolt Zap...................... Allows members to send instant messages to
other online members and Friends, as well as to
anyone else on the Internet.

Cards......................... Allows our members to email "virtual cards" to
other members with personalized messages.

Horoscopes.................... Provides proprietary horoscopes targeted to our
teen members and provides interactive feedback
on the horoscopes from members.

Diaries....................... Allows our members to create a digital diary
that does not run the risk of being found by
mom, dad or a sibling. Members have the option
of allowing others to see certain entries if
they desire.

ADVERTISING SALES

As of February 29, 2000, we had a direct advertising sales force comprised
of 26 sales and support people, in addition to our Director of Advertising and
our Vice President of Ad Sales. This group is located primarily in New York, and
we have sales offices in Chicago and Los Angeles and plan to open offices in
Detroit and San Francisco in 2000. Our sales force has been successful in
attracting a diverse group of advertisers by promoting the value of our teen
audience and teen-focused Web site environment. During 1999, our sales force
entered into contracts with over 150 advertising customers. The following is a
list of selected customers from various industries that have advertised on or
sponsored content of Bolt.com within the last 12 months:

COMMUNICATIONS AND TECHNOLOGY ENTERTAINMENT AND MEDIA HEALTH AND BEAUTY
BellSouth Bertelsmann/BMG Music Clinique
Hewlett Packard MGM Pictures Coty
Intel MTV Gillette
Microsoft Showtime Johnson & Johnson
Sprint Sony Pictures Entertainment Smith Kline Beecham
FASHION AND RETAIL FOOD AND BEVERAGE AUTOMOTIVE
Artcarved Coca Cola Ford Motor Company
Converse Dr. Pepper/7Up Toyota
J.C. Penney

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This list is indicative of the type of companies that have advertised on or
sponsored content of Bolt.com in an attempt to target our teen member base.
Revenues from these companies for the year ended December 31, 1999 range from
about $8,000 to $131,000. We cannot assure you that these companies will
continue to advertise on or sponsor content of Bolt.com.

We currently derive, and expect to continue to derive, a substantial
portion of our revenues from advertising sales. We offer advertisers the
following advertising options:

- Banner advertisements. An advertiser may purchase banners, which are
graphical advertisements with the advertiser's logo, for placement
throughout our site or in a specific area within our site.

- Integrated content sponsorships. Advertisers may also sponsor a
specific area or feature of our site. For example, Gillette currently
sponsors a feature called "Lookin' Good" that features ways that teens
deal with their personal appearance.

- Pop-up advertisements. Advertisers may choose to have an advertising
window "pop-up" following certain actions by members on Bolt.com. For
instance, after a member responds to a poll question about a pop star, a
window may pop-up advertising a new artist or musician.

- Section sponsorships. Advertisers may also pay to own a premiere
position within a particular section or sections of Bolt.com. For
example, Emusic.com is currently a section sponsor of the Bolt.com music
section.

- A rotating "viewer window." Our front page contains a rotating viewer
window that displays advertisements and promotes new content on the
site. Because this window is constantly changing and is always visible
to members, it provides our advertisers with an excellent way to catch
the attention of our members.

- HTML-based and text-based advertisements in targeted email. We send
over 5.7 million targeted HTML-based emails every week. We provide
advertisers the opportunity to place a graphic advertisement within
these emails. In addition, we also send over 1.0 million text-based
targeted emails every week. Advertisers can choose to include a textual
advertisement in these messages. Because of our ability to target these
emails, the advertisements tend to be more relevant to the recipient.

- Opt-in registration boxes. When new members register, they have the
opportunity to "opt-in" or request information about products or
services from certain advertisers. These advertisers, such as BMG Music,
pay a fee for each new member that opts-in for information about their
products or services during registration. Thousands of new members
register for our site every day.

E-COMMERCE AND THE BOLT STORE

In September 1999, we launched the Bolt Store, which we believe is one of
the largest collections of teen-focused product offerings on the Internet. In
creating the Bolt Store, we have utilized our relationships with our more than
1.9 million members by asking them, through surveys, polls and other interactive
tools which products they would like to buy through our Web site. We allow our
members to help create the Bolt Store by telling us what brands and products
they like and do not like, and how their lifestyles are impacted by those
products. We listen to their requests and attempt to facilitate their needs, by
offering a number of these products through the Bolt Store. By using member
input to create the Bolt Store, we shift the model of traditional retailing from
promotion-based sales (a "push" model) to one where our members choose the
products they want (a "pull" model). The Bolt Store currently contains over 450
products that our members help select, including apparel, technology, sporting
gear and other items. We expect to significantly increase the number of products
we offer over the next year.

Because we have a valuable database of aggregate and individual product
preferences from the millions of teens that visit Bolt.com on a monthly basis,
we expect that the Bolt Store will become an effective example of one-to-one
marketing on the Internet. Because of this, we believe we will be able to sell
more effectively than traditional retailers and other online retail sites that
are solely focused on commerce because our members are
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telling us and each other what brands and products they like and do not like,
and how their lifestyles are impacted by those products.

Within the Bolt Store, we manage all ordering, returns, and product
selection. We have carefully selected several fulfillment partners to supply the
products from their warehouses and drop-ship orders to our customers after
receiving an order confirmation from us. We take title of inventory from the
shipper; however, products generally are shipped the same day the order is
fulfilled, resulting in our having little, if any, inventory. Our customers are
given a number of shipping options, all of which are handled by standard
shipping franchises such as UPS and Federal Express.

We also generate e-commerce revenues by charging transaction fees to
retailers and e-commerce companies that wish to use our site to promote their
products and services as well as to purchase premium positioning on our site. We
facilitate contact between our members and many of these companies by providing
a link from Bolt.com to their Web sites. Generally these companies pay us either
a flat fee, a fee based on retail sales to our members or a combination of the
two. We currently have e-commerce transaction fee arrangements with companies
including CDNow, Lids and InfoBeat.

MARKET RESEARCH

We intend to utilize the valuable data and information we collect from our
teen members in order to make market research an important part of our business.
We intend to offer to teen-focused marketers a variety of products ranging from
online surveys to complete trend reports within the scope of our Web site. These
products will be sold as components of our advertising business.

We have begun to provide market research to a number of our advertising
customers, including a major apparel manufacturer researching the latest trends
in the jeans market and Artcarved, a leading manufacturer of class rings.
Through surveys and polls on Bolt.com, Artcarved was able to collect research
information on how teens perceived class rings, the growth potential of the
industry, and how teens intend to purchase rings (i.e., through in-school
representatives or at jewelry stores).

CUSTOMER CARE

Site support. Users who are unfamiliar with our site can click on the
"help" button on Bolt.com. This feature describes all of our Bolt.com features
and services and explains to the user how to use them. In addition, our members
can post messages on our help boards and our Bolt staff will respond. Finally,
users can also send emails to Bolt Support, and our staff generally responds
within one day.

Bolt Store customer support. We provide live customer support to our Bolt
Store customers 24 hours per day, seven days per week. We currently outsource
this service to a third-party provider but we expect to provide this service
in-house in the future. Our Bolt Store customers can obtain live customer
support at any time simply by clicking through to a customer service
representative and "chatting" online. In addition, our customers can obtain
order processing, shipping status and other account information online at
Bolt.com.

MARKETING AND PROMOTION

We employ a variety of online, offline and non-traditional marketing
methods designed to:

- build our brand awareness;

- drive traffic to our site;

- build our registered member base; and

- minimize our member and customer acquisition costs.

To increase our brand recognition online, we maintain strategic
relationships with leading Internet portals and Web sites, including America
Online, MSN Hotmail, Yahoo! and Lycos. We also use traditional advertising such
as print, television and radio promotions. We believe that promotion in
publications such as the New York Times and Advertising Age is particularly
effective in reaching potential sponsors. We also
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intend to launch an advertising campaign in print, radio and television that
will promote Bolt.com as a place for teens to be empowered through having a
collective voice. We intend to choose media that will allow us to reach a
significant portion of the teen market, including alternative and top 40 radio
formats, teen magazines and television programming focused on the teen market.

In addition, we promote our brand with non-traditional marketing promotions
at events such as rock concerts, sporting events, and other gatherings of
interest to teens. For example, in the third quarter of 1999, we conducted the
"Power Trip," during which a Bolt-branded Airstream trailer traveled to over 50
events to encourage teens to discuss teen empowerment in their own communities.
Tens of thousands of teens registered for our site through this event. We are
also a sponsor of the Gravity Games in Providence, Rhode Island and Mammoth
Mountain, California which are produced by NBC and Petersen Action Sports
Publications. We receive a sponsorship placement at the Gravity Games and ad
placement in designated Petersen magazines, in return for a Gravity Games
featured placement on Bolt.com. A Gravity Games page is contained within the
Sports Section of Bolt.com and is promoted by banners and buttons as well as
direct mail newsletters to Bolt.com members.

BOLT.COM STRATEGIC RELATIONSHIPS

We believe that forming strategic alliances with major online portals and
service providers can increase our brand awareness and be a source of
significant new Web site traffic. We currently have strategic relationships with
the following:

- America Online. We are the only teen community partner for the AOL
branded service's teen message boards and teen chat rooms. We entered
into a 26 month agreement with AOL on November 16, 1999. Under this
agreement, we will receive brand exposure because we are entitled to
establish and maintain a linked, customized, user-generated content
environment at aol.bolt.com, and all teen-focused message boards, chat
rooms, and teen community areas within the AOL service, including
aol.bolt.com, will be Bolt branded. We will also have the exclusive
ability to sell advertising on aol.bolt.com. In addition, we will
receive prominent placements in the AOL shopping service and on teen
targeted sites on the AOL network, including Spinner, WinAmp, Netscape,
Compuserve and MovieFone. We receive a fee from AOL for providing teen
expertise and management services in connection with managing AOL's teen
community areas. This fee is offset by the value of the marketing
services we receive from AOL.

- MSN Hotmail. We provide teen content for the MSN Hotmail WebCourier
Newsletter Program. We have an agreement with Hotmail which expires on
August 27, 2000. This relationship has been a key traffic driver for us
and an important service for Hotmail's teen user base. The Bolt
newsletter is delivered twice per week to over 2.2 million Hotmail users
who elected to receive our content when they registered with Hotmail.
Bolt pays Hotmail a slotting fee and a minimal mail postage per mailing
fee after the first 1.5 million newsletters have been mailed. In
addition to the WebCourier Program, we also advertise on the MSN
Shopping Channel, MSN Hotmail and the MSN service targeted to teens. We
can include advertising in the newsletter and are entitled to all
revenues generated from the sale of these advertisements.

- Yahoo!. We are a co-branding sponsor of the Yahoo! Teen Chat Channel, a
popular area on Yahoo! for teens. This agreement, which was entered into
in September 1999, has a nine month term. As a co-branding sponsor of
the Yahoo! Teen Chat Channel, we are the only teen-focused site that has
a fixed banner placement on the top of the entrance page to Yahoo! Teen
Chat. We also receive a content placement on the left side of this page
that changes continually with new Bolt content. In addition, we receive
shopping related promotions and receive a number of teen targeted banner
advertisements on the Yahoo! network. We pay Yahoo! a fixed fee and are
guaranteed a certain number of impressions.

- Lycos. We provide teen-generated content for Lycos' MailCity email
Newsletter. We entered into an agreement with Lycos in August 1999. This
agreement expires on January 1, 2002. This program allows us to deliver
HTML-based email to over 350,000 teens who have specifically expressed
interest

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in receiving our mailing. This mailing is delivered once per week every
Tuesday. We include advertising and sponsorships in the newsletter and
are entitled to all revenues generated from the sale of these
advertisements. We also receive featured placement on teen targeted
sites in the Lycos network, including Lycos Shop, Tripod, Angel Fire and
other Lycos sites focused on 12 to 24 year olds.

- Ford Motor Company. On November 17, 1999, we entered into a partnership
with Ford Motor Company to develop Cars.bolt.com, a co-branded
destination on our site, that we launched in January 2000. Cars.bolt.com
will feature auto-related content geared towards teens, including
personalized classified advertisements, an automotive dictionary,
teen-focused buyer guides, information on how to buy and lease cars and
an interactive drivers education seminar called "Behind the Wheel" that
will help our teen members prepare for their driving license tests. In
addition, Cars.bolt.com will feature an interactive Ford-branded design
studio called "Design Your Own Dream Car." With this feature, our
members will use a drag and drop graphical interface to design cars and
submit their designs to Ford. Under this agreement, we will also provide
quarterly market research studies to Ford. This agreement continues
through December 31, 2002, but may be terminated on December 31, 2000 or
2001 by either party.

- AT&T Wireless Initiative. On January 28, 2000, we entered into an
agreement with AT&T Wireless Services, Inc. Under the agreement, we will
promote AT&T's wireless services on Bolt.com and solicit and refer
subscribers of these services to AT&T. Using these services, members
will be able to access "BoltEverywhere" -- the wireless version of
several of Bolt's proprietary applications such as Bolt Notes and
Tagbooks. Also, members that purchase the AT&T wireless services through
Bolt.com will have BoltEverywhere as a default mobile channel. In
consideration, AT&T must pay us a fixed fee and will also pay us a
commission for each subscriber to the AT&T wireless services that was
referred by Bolt. This agreement has a term of one year, but is
automatically renewed for successive one-year terms unless written
notice is given by us or AT&T prior to the end of the term.

COMPETITION

The market for Internet traffic, registered users and Internet advertising
is new and rapidly evolving, and competition is intense. With no substantial
barriers to entry, we expect that competition will continue to intensify.

We believe that the primary competitive factors in creating community on
the Internet and attracting advertisers are:

- brand recognition;

- an existing critical mass of users that demonstrate affinity and
loyalty;

- the ability to target a specific demographic;

- variety of value-added services, including unique and relevant tools and
applications;

- reliability and quality of service; and

- the overall cost-effectiveness of the advertising medium.

We believe we compete favorably on these factors particularly due to: (1)
our commitment to build our brand awareness through traditional and Internet
advertising and strategic relationships; (2) our commitment to continue to
develop our technology and expand the depth and relevance of the online products
and services we offer; (3) our ability to target a demographically-focused
audience; (4) our large and active registered teen member base; and (5) our
member loyalty as demonstrated by the "stickiness" of our site.

We compete with sites, and sites with areas, that are primarily focused on
targeting teens online. These sites include MTV Online and the Yahoo! Teen Chat
area. We also compete with retailers that have moved to the Web such as Alloy
Clothing and Delia's. We will likely also face online competition in the future
from:

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- search engine providers;

- content sites;

- commercial online services;

- sites maintained by Internet service providers;

- traditional media companies such as MTV, Disney and NBC, many of which
have recently made significant acquisitions or investments in Internet
companies; and

- other entities that attempt to establish communities on the Internet by
developing their own or purchasing one of our competitors.

We also compete with traditional forms of media, such as newspapers,
magazines, radio and television, for advertisers and advertising revenues.

TECHNOLOGY AND SYSTEMS

We rely almost exclusively on a variety of third-party products for our
hardware and software. We operate our network to ensure maximum uptime, to
obtain, preserve and analyze customer data, and to enhance our members'
experience.

Our goal is to maintain the technological infrastructure required to handle
heavy traffic, e-commerce and complex graphics on our site. We currently house
our servers at Exodus Communications in New Jersey. Exodus maintains an
environmentally controlled data center with multiple communication lines and
uninterrupted power. We believe that our infrastructure conforms to the latest
industry standards. We are also in the process of installing additional servers.
If a server fails, we believe that we have enough back-up servers to ensure that
our service interruption would be minimized. Our infrastructure is scalable in
that as additional capacity is needed, additional servers can be easily added.
We are also planning to expand our server system to multiple data centers.
Currently, a complete failure at our data center would prevent us from
delivering our services to our customers and prevent users from accessing our
Web site. Our agreement with Exodus may be terminated by either party with 90
days' notice. If this agreement were terminated, we believe that we could find
another facility to house our servers on commercially reasonable terms and there
would be no interruption in our operations.

We also run weekly full backups of all of our servers, as well as daily
incremental backups of these same machines. These tape backups are stored off of
the premises.

TRADEMARKS AND INTELLECTUAL PROPERTY

We use the following trademarks for which applications in the United States
Patent and Trademark Office are pending: "Bolt," our logo, "Banned On," "Bolt
Notes" and "Bolt Reporter." We also have trademark and domain name applications
pending in other countries.

GOVERNMENT REGULATION

We are subject to various laws and governmental regulations relating to our
business. Although there are currently few laws or regulations directly
applicable to online services or the Internet, the increasing popularity and use
of the Internet might cause additional laws and regulations to be adopted. These
laws and regulations currently cover or may cover in the future issues including
the following:

INTERNET PRIVACY

The Children's Online Privacy Protection Act of 1998, which was enacted by
the United States Congress on October 21, 1998 and for which the Federal Trade
Commission issued its final regulations on October 20, 1999, regulates the
collection, use, and/or disclosure of personal information obtained from
children under the

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age of 13. Under the provisions of this Act, which becomes effective on April
21, 2000, Web sites catering to children will be required to:

- provide notice on their Web site and to parents of children under the
age of 13 with notice of what information is being collected, how the
site uses the information, and the Web site's practices regarding
disclosures of information;

- obtain verifiable parental consent for the collection, use and/or
disclosure of their children's information, and allow parents to
terminate their consent at any time;

- provide parents an opportunity to review the information collected from
their children; and

- refrain from conditioning a child's participation in a game on the child
revealing more information than reasonably necessary to participate.

We target teens 15 to 20 years old. Prior to the effective date of the Act,
we will cease collecting information from children under age 13, and we will
remove all registration and profile information for members known to us to be
under the age of 13. We will also take affirmative steps to discourage children
under the age of 13 from attempting to register as members. However, if we
discover that a Bolt member about whom we have collected information has
misrepresented his or her age and is in fact under age 13, or that a child under
13 has disclosed personal information on our bulletin boards or in any other
public forum on our site, we will have to remove that person as a Bolt member
and remove all registration and profile information for this person.

It is important to our members that we protect their privacy. We have
formed a privacy task force comprised of senior level employees to further
evaluate our privacy policy. We discourage our members from disclosing their
identities. At registration, we ask that new members make up user names instead
of using their real names. We use passwords and user IDs to ensure anonymity
among our members. In addition, we do not sell or distribute the identities,
preferences or page views of individual members without their permission. We do
disclose certain information to third parties, with our members' permission, in
connection with product promotions and special programs in which members elect
to participate. The market research data that we sell to third parties consists
of aggregate information obtained from our members; for example, what certain
types of users like to do in their spare time or which of two products our
members prefer. While we believe that we currently adequately provide for our
members' privacy, our current programs may not conform to legislation or
regulations adopted in the future by the Federal Trade Commission or other
governmental entities. In addition, if unauthorized persons were able to
penetrate our security and gain access to, or otherwise misappropriate, our
members' personal information, we could be subject to liability. Such liability
could include claims for misuses of personal information, such as for
unauthorized marketing purposes or unauthorized use of credit cards. These
claims could result in litigation which could require us to expend significant
financial resources and divert management's attention from operations.

The European Union adopted a Directive which became effective in October
1998 that imposes restrictions on the collection and use of personal data. Under
the Directive, European Union citizens are guaranteed the right of access to
their data, the right to know where the data originated, the right to have
inaccurate data corrected, the right to recourse in the event of unlawful
processing of information and the right to withhold permission to use their data
for direct marketing. The Directive could affect U.S. companies that collect
information over the Internet from individuals in European Union member
countries and may impose restrictions that are more stringent than current
Internet privacy standards in the United States or our own privacy policies. The
Directive does not, however, define what standards of privacy are adequate. As a
result, the Directive might adversely affect the activities of entities,
including Bolt, that engage in data collection from members in European Union
member countries.

INTERNET TAXATION

A number of legislative proposals have been made by federal, state, local
and foreign governments that would impose additional taxes on the sale of goods
and services over the Internet, and some states have taken measures to tax
Internet-related activities. Although in October 1998 Congress placed a
three-year moratorium on state and local taxes on Internet access or on
discriminatory taxes on electronic commerce, existing

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state or local laws were excluded from this moratorium. Further, once this
moratorium is lifted, some type of federal or state taxes may be imposed upon
Internet commerce. Such legislation or other attempts at regulating commerce
over the Internet may cause sales at the Bolt Store to decrease, which would
affect our business.

DOMAIN NAMES

Our domain names are our Internet "addresses." Domain names have been the
subject of significant trademark litigation in the United States. We have
applied for registration of certain domain names in the United States and
foreign countries. Third parties might bring claims for infringement against us
for the use of these domain names. Moreover, because domain names derive value
from the individual's ability to remember such names, it is possible that our
domain names could lose their value if, for example, members begin to rely on
mechanisms other than domain names to access online resources.

The current system for registering, allocating and managing domain names
has been the subject of litigation and of proposed regulatory reform. Our domain
names might lose their value, and we might have to obtain entirely new domain
names in addition to or instead of our current domain names if such litigation
or reform efforts result in a restructuring of the current system.

JURISDICTION

Due to the global reach of the Internet, it is possible that the
governments of other states and foreign countries might attempt to regulate our
activities or prosecute us for violations of their laws. This could seriously
affect our business.

In addition, because our products and services are available over the
Internet anywhere in the world, multiple jurisdictions may claim that we are
required to qualify to do business as a foreign corporation in each of those
jurisdictions. Our failure to qualify as a foreign corporation in a jurisdiction
where we are required to do so could subject us to taxes and penalties for the
failure to qualify. It is possible that state and foreign governments might also
attempt to regulate our transmissions of content on our Web sites or prosecute
us for violations of their laws. State or foreign governments might allege or
charge us with violations of local laws, we might unintentionally violate these
laws, and these laws might be modified, or new laws might be enacted, in the
future.

EMPLOYEES

As of February 29, 2000, we employed a total of 170 full-time employees in
the following areas:

- product development;

- technology;

- sales and business development;

- e-commerce;

- marketing;

- market research; and

- finance and administration.

In addition, about 11 persons provide services to us pursuant to consulting
and/or freelance agreements. To support our anticipated future growth, we expect
to hire additional employees, particularly in the areas of sales and marketing.
None of our employees is represented by unions, and we believe our relations
with our employees are good.

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FACILITIES

Our principal offices are located in about 11,500 square feet of leased
space at 304 Hudson Street, New York, New York 10013. The lease for this space
expires February 27, 2007. On February 18, 2000, we entered into a lease for
about 92,000 square feet of office space in New York, New York. We expect to
occupy this space within six months, and the lease expires ten years from our
date of occupation. We also currently lease a small office in Chicago, Illinois
pursuant to a lease that expires on December 31, 2000 and a small office in Los
Angeles, California on a month-to-month basis.

LEGAL

We are not currently involved in any material legal proceedings, nor, to
our knowledge, are any threatened.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning our
directors, executive officers and key employees:

NAME AGE POSITION
---- --- --------

Daniel A. Pelson(2)(3).................... 33 President, Chief Executive Officer and Director
Jane Mount................................ 28 Executive Vice President
Richard Glosser........................... 39 Executive Vice President
Albert G. Pastino......................... 57 Chief Financial Officer
Frank Harrison............................ 38 Senior Vice President of Corporate Development
Mark Stutzman............................. 30 Chief Technology Officer
Steven R. Kamen........................... 36 Vice President and General Counsel
Jeanne Sachs.............................. 34 Vice President of Ad Sales
Justin Nesci.............................. 31 Vice President of Business Development
Alexa Tobin............................... 31 Vice President of Commerce
David Titus, Ph.D......................... 46 Vice President of Business Intelligence
Alan Colner(1)............................ 44 Director
Robert Dove(1)(2)......................... 45 Director
Samantha McCuen(1)(2)..................... 31 Director
William S. Peabody........................ 28 Director

- ------------
(1) Member of our Audit Committee
(2) Member of our Compensation Committee

(3) Member of our Option Committee

Daniel A. Pelson co-founded Bolt and has served as our President and Chief
Executive Officer and as a director since our inception. Mr. Pelson also serves
as Chairman of the Board of Directors for Concrete Media Construction, a custom
publishing and Web site development company that was spun off from Bolt in
December 1998. Prior to founding Bolt, in 1994 Mr. Pelson created Word, an
online magazine that was acquired by Icon CMT Corporation in 1994. From 1988 to
1993, he served as a marketing, sales and product development executive for Sun
Microsystems where he marketed and sold products and services to the media
industry. Mr. Pelson holds a B.A. in political science and economics from
Colgate University and an M.B.A. from New York University's Stern School of
Business.

Jane Mount co-founded Bolt and has served as Executive Vice President since
October 1998 and also served as our Creative Director from September 1996 to
September 1998. Ms. Mount is responsible for continually driving the usage
statistics of Bolt, and responding to the constantly evolving needs of the teen
marketplace. From November 1995 to August 1996, she served as Design Director of
Word, an online magazine which was acquired by Icon CMT Corporation in 1994. Ms.
Mount holds a B.A. from Davidson College.

Richard Glosser has served as Executive Vice President since January 2000.
From November 1997 to October 1999, Mr. Glosser served jointly as Executive Vice
President of Sony Online Entertainment and President of Columbia TriStar
Interactive where he managed business operations for TheStation@sony.com, a
leading online game destination, and where he also supervised Columbia TriStar
Interactive's online and interactive television efforts. From February 1994 to
November 1997, Mr. Glosser was Founder and Senior Vice President of Columbia
TriStar Interactive where he launched Sony Pictures Entertainment's film,
television and online game efforts. From August 1988 to February 1994, Mr.
Glosser served in business development and operations positions in various
television divisions of Sony Pictures Entertainment. Mr. Glosser started his
career at NBC where he worked from September 1982 to May 1986. He holds a B.S.
in Entrepreneurial Management/Marketing from The Wharton School of the
University of Pennsylvania and an M.B.A. from Columbia Business School.

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Albert G. Pastino has served as our Chief Financial Officer since November
1999. From June 1997 to June 1999, Mr. Pastino served as Senior Vice President
and Treasurer of AmTec, Inc., a telecommunications company. From July 1993 to
March 1997, Mr. Pastino was with Kohlberg and Company, a private equity
investment company, where he served in a variety of positions, including as the
President of Kisco Capital Company, Inc., an affiliate of Kohlberg and Company,
and also served on the boards of directors of a number of Kohlberg & Company's
portfolio companies. From 1989 through 1992, Mr. Pastino served as Senior Vice
President and Chief Operating Officer of Fortis Private Capital, Inc., a private
equity investment company specializing in expansion financings and management
buyouts. Mr. Pastino began his business career at Deloitte & Touche LLP where he
served as a partner. Mr. Pastino also gained investment banking experience while
working at Alex. Brown & Sons, Incorporated and at various times throughout his
career served as the interim chief financial officer of a number of privately
and publicly held companies.

Frank Harrison has been our Senior Vice President of Corporate Development
since October 1999 and served as our acting Chief Financial Officer from
September 1998 to October 1999. From 1991 to 1998, Mr. Harrison was the
principal of Harrison & Company, LLC, a firm he founded in 1991 that provided
finance and accounting services to middle-market advertising, new media, and
high-technology companies, as well as to large, multi-national public companies.
From 1987 to 1991, he was a manager in the Stamford, CT office of Coopers &
Lybrand in the Emerging Business Services division. He holds a B.S. in Business
Administration from the University of Dayton.

Mark Stutzman has served as our Chief Technology Officer since July 1999.
From July 1998 to June 1999, Mr. Stutzman served as Executive Director,
Technology at Cyberian Outpost, a leading e-commerce retailer, where he managed
the development, data, system operations and warehouse teams. From 1995 to 1998,
he was employed at IBM where, he oversaw the design and implementation of an
infrastructure that was designed to scale to support over 1,000
business-to-business Web sites for IBM's corporate customers. While at IBM, Mr.
Stutzman also managed all technical facets of ShopIBM, IBM's premiere commerce
site, and served as the technical team leader for IBM Global Service's Web
hosting department. Mr. Stutzman holds a B.A. in English from S.U.N.Y. New Paltz
in New York.

Steven R. Kamen has served as our Vice President and General Counsel since
January 2000. From May 1995 to January 2000, Mr. Kamen practiced at the law firm
of Sills Cummis Radin Tischman Epstein & Gross P.C. in Newark, New Jersey where
he became a partner in 1997 in the Corporate Department. From October 1990 to
May 1995, Mr. Kamen worked as an Associate in the Corporate Department at
Morgan, Lewis & Bockius LLP in New York City. Mr. Kamen serves on the Counsel of
Trustees for the Healthcare Foundation of New Jersey in Roseland, New Jersey. He
holds a B.A. from the University of Michigan (Ann Arbor), where he double
majored in Japanese language and literature and political science, and a J.D.
from Columbia Law School in New York City.

Jeanne Sachs has served as our Vice President of Ad Sales since May 1,
1999. From November 1994 to May 1999, Ms. Sachs served as Advertising Director
of YM, a leading teen-focused magazine. Prior to joining YM, Ms. Sachs held
national advertising sales positions at a number of teen and woman-focused
magazines, including Seventeen, Vogue and Woman's Day. Ms. Sachs holds a B.S. in
International Business and Economics from New York University.

Justin Nesci has been our Vice President of Business Development since
December 1999 and served as our Director of Business Development from April 1999
to December 1999. From March 1997 to March 1999, Mr. Nesci served as an
advertising director for E! Online. From February 1996 to March 1997, Mr. Nesci
managed brand marketing and media sales for 2d Interactive, Inc., a start-up,
interactive media company. From August 1994 to January 1996, Mr. Nesci was a
management consultant at Lochridge & Company. From September 1991 to August
1994, Mr. Nesci was an industry analyst for Dataquest, Inc. Mr. Nesci holds a
B.A. in Organizational Behavior & Management and Political Science from Brown
University.

Alexa Tobin has served as our Vice President of Commerce since May 1999.
From February 1998 to April 1999, Ms. Tobin served as Director of Merchandising
for Music Boulevard/N2K, Inc., a leading e-commerce company. From June 1996 to
July 1997, Ms. Tobin was the Music Director at WXRK-FM in New York City. From
May 1994 to February 1995, Ms. Tobin was the Program Director at WEQX-FM in
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Albany, NY. From February 1995 to June 1996, she served as Program Director at
WBRU-FM, in Providence, Rhode Island. From October 1989 to April 1994, Ms. Tobin
worked for Newbury Comics, a leading retailer of music and lifestyle
merchandise, where her duties included store management, buying, and ultimately
managing the entire distribution facility. Ms. Tobin holds a B.A. in political
science from Brown University.

Dr. David Titus has been our Vice President of Business Intelligence since
December 1999 and served as our Director of Business Intelligence from August
1999 to December 1999. From June 1997 to July 1999, Dr. Titus managed consumer
research at Philip Morris. From June 1994 to May 1997, he served as a Client
Service Executive at Eric Marder Associates, a market research consulting
company, where his accounts included Fortune 100 companies in the
telecommunications, high tech and consumer package goods industries. Dr. Titus
holds a Ph.D. and M.S. in Social Psychology from Rutgers University and B.A in
psychology from Montclair State College.

Alan Colner has been a director since November 1998. Since August 1996, he
has served as Managing Director, Private Equity Investments at Moore Capital
Management, Inc. Before Joining Moore Capital, Mr. Colner was a Managing
Director of Corporate Advisors, L.P., the general partner of Corporate Partners,
a private equity fund affiliated with Lazard Freres & Co. LLC. He also serves on
the board of directors of iVillage Inc. and NextCard, Inc. as well as several
private companies. Mr. Colner holds a B.A. from Yale University and an M.B.A.
from the Stanford University Graduate School of Business.

Robert Dove has been a director since January 1997. Since May 1996, Mr.
Dove has been an Executive Vice President and Managing Director of Bechtel
Enterprises Holdings, Inc., a wholly-owned subsidiary of Bechtel Group, Inc. Mr.
Dove is also a Senior Vice President of Bechtel Group, Inc. From 1985 until
1996, Mr. Dove worked for UBS Securities, an investment banking firm, where he
served as, among other things, a Managing Director. Mr. Dove also serves as a
director of several private companies. Mr. Dove is a graduate of the Forest
School and is a past member of the Institute of bankers in London.

Samantha McCuen has been a director since February 1999. Ms. McCuen is a
Managing Director of Sandler Capital Management, an investment management firm.
Ms. McCuen joined Sandler in 1996 and is currently responsible for analyzing,
structuring and managing Sandler's investments in Internet and technology
companies in the public and private sectors. She is also a Principal of Sandler
Internet Partners, L.P. From 1990 to 1996, Ms. McCuen held both equity research
and investment banking positions at Morgan Stanley & Co. Incorporated where she
specialized in Internet and PC software companies, and was a co-author of The
Internet Report. Ms. McCuen also serves as a director of several private
Internet companies. Ms. McCuen holds a B.A. in Economics from Lehigh University.

William S. Peabody has been a director since February 1999. In September
1992, Mr. Peabody founded Tripod.com, a successful Web site community that had
over four million registered users. He served as the President and Chief
Executive Officer of Tripod until it was sold to Lycos, Inc. in February 1998.
From February 1998 until February 2000, he served as the Vice President of
Network Strategy for Lycos. Mr. Peabody is an observer to the Lycos board of
directors, and sits on the board of directors of several private companies,
including Streetmail.com and eZiba.com. Mr. Peabody holds a bachelor's degree in
political philosophy and sociology from Williams College.

BOARD COMPOSITION

Upon completion of this offering, our board of directors will consist of
five members divided into three classes. Each year the stockholders will elect
the members of one of the three classes to a three-year term of office. Upon
completion of this offering, Robert Dove and Samantha McCuen will serve in the
class whose term expires in 2001; Alan Colner will serve in the class whose term
expires in 2002; and Daniel Pelson and William Peabody will serve in the class
whose term expires in 2003.

COMMITTEES OF THE BOARD OF DIRECTORS

Upon completion of this offering, our board of directors will have a
compensation committee, which will make recommendations concerning salaries and
incentive compensation for our employees and consultants,

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establish and approve salaries and incentive compensation for our executive
officers and administer our stock plans. Upon completion of this offering, our
board of directors will also have an audit committee, which will review the
result and scope of audits and other services provided by our independent public
accountants. Upon completion of this offering, our board of directors will also
have an option committee, which will operate under the authority of the
compensation committee and will have the authority to issue small numbers of
options to employees who are not executive officers.

COMPENSATION OF DIRECTORS

Our directors who are also our employees receive no compensation for
serving on the board of directors. We reimburse our non-employee directors for
all travel and other reasonable expenses incurred in attending board of director
and committee meetings. Our non-employee directors are eligible to receive
nonqualified stock option grants under our stock option plans. In April 1999, we
granted William S. Peabody, one of our directors, an option to purchase 60,500
shares of our common stock at an exercise price of $.46 per share. One fourth of
this option becomes exercisable after one year and the remaining portion becomes
exercisable in 36 equal monthly installments thereafter. We may in the future
grant additional nonqualified stock options to non-employee directors as an
incentive to join or remain on the board of directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Upon completion of this offering, the compensation committee of our board
of directors will consist of Daniel Pelson, Robert Dove and Samantha McCuen.
Neither Mr. Dove nor Ms. McCuen has been an officer or employee of Bolt at any
time since our inception. No executive officer of Bolt serves as a member of the
board of directors or compensation committee of any entity that has one or more
executive officers serving as a member of our board of directors or compensation
committee. Prior to the formation of the compensation committee, the board of
directors as a whole made decisions relating to the compensation of our
executive officers.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued
during the year ended December 31, 1999 to our Chief Executive Officer and our
other most highly compensated executive officers as of December 31, 1999 whose
total salary and bonus for 1999 exceeded $100,000:

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SHARES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- --------------------------- --------- -------- ------------ ---------------

Daniel A. Pelson............................. $153,583 $-- -- $--
President and Chief Executive Officer
Jane Mount................................... 111,083 -- 444,125 --
Executive Vice President of Product
Development
Frank Harrison............................... 135,682 -- -- --
Senior Vice President of Corporate
Development
Jeanne Sachs................................. 110,444 -- 150,000 --
Vice President of Ad Sales

OPTION GRANTS IN 1999

The following table presents each grant of stock options during the fiscal
year ended December 31, 1999 to each of the individuals listed in the Summary
Compensation Table.

All of the options granted to Ms. Mount in 1999 were exercisable
immediately upon grant. The options granted to Ms. Sachs vest as to 25% on April
27, 2000 and the remaining options vest equally each month over a 36 month
period.

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The potential realizable value is calculated based on the ten-year term of
the option at the time of grant. Stock price appreciation of 5% and 10% is
assumed pursuant to rules promulgated by the Securities and Exchange Commission
and does not represent our prediction of our stock price performance. The
potential realizable values at 5% and 10% appreciation are calculated by:

- multiplying the number of shares of common stock under the option by the
assumed initial public offering price of $11.00 per share;

- assuming that the aggregate stock value derived from that calculation
compounds at the annual 5% or 10% rate shown in the table until the
expiration of the options; and

- subtracting from that result the aggregate option exercise price.

Percentages shown under "Percentage of Total Options Granted in 1999" are
based on an aggregate of 3,147,500 options granted to our employees, consultants
and directors under our stock option plans during 1999.

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES APPRECIATION FOR
UNDERLYING PERCENTAGE OF TOTAL EXERCISE OPTION TERM
OPTIONS OPTIONS PRICE PER EXPIRATION ------------------------
GRANTED GRANTED IN 1999 SHARE DATE 5% 10%
---------- ------------------- --------- ---------- ---------- -----------

Daniel A. Pelson.......... -- -- -- -- -- --
Jane Mount................ 444,125 14.1% $.46 2/19/09 $7,753,461 $12,467,106
Frank Harrison............ -- -- -- -- -- --
Jeanne Sachs.............. 150,000 4.8 .46 4/27/09 2,618,675 4,210,675

OPTION VALUES AT DECEMBER 31, 1999

The following table presents the number and value of securities underlying
unexercised options that are held by each of the individuals listed in the
Summary Compensation Table as of December 31, 1999. No shares were acquired on
the exercise of stock options by these individuals during 1999.

Amounts shown under the column "Value of Unexercised In-the-Money Options
at December 31, 1999" are based on the assumed initial public offering price of
$11.00, multiplied by the number of shares underlying the option, less the
exercise price payable for these shares.

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------

Daniel A. Pelson.......................... -- -- -- --
Jane Mount................................ 623,290 35,835 $6,562,310 $ 376,268
Frank Harrison............................ 100,000 -- 1,050,000 --
Jeanne Sachs.............................. -- 150,000 -- 1,581,000

EMPLOYMENT AGREEMENTS

In December 1999, we entered into an employment agreement with Richard
Glosser to serve as our Executive Vice President starting on January 17, 2000.
The term of this agreement is two years. Mr. Glosser will be paid a base salary
of $180,000 during the first year and $195,000 during the second year of this
agreement. Mr. Glosser is also entitled to (1) a yearly bonus of $50,000, (2) a
performance bonus of up to $100,000 based on Bolt's attainment of mutually
agreed upon revenue performance targets and (3) an additional bonus based upon
the amount by which our revenues exceed these targets. Pursuant to this
agreement, Mr. Glosser received a non-qualified option to purchase 300,865
shares of our common stock at an exercise price of $2.66 per share. This option
vests as to 25% of the shares on the first anniversary of the date of grant and
the remaining portion becomes exercisable in 36 equal monthly installments
thereafter. In

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addition, in any year in which the revenue performance target of Bolt is
reached, Mr. Glosser is entitled to an option for 44,240 shares of our common
stock. Each such option would vest immediately upon grant and would have an
exercise price equal to the fair market value on the date of grant. Mr. Glosser
is also entitled to reimbursement of up to $160,000 in relocation expenses. If
we terminate Mr. Glosser without cause or he terminates his employment for good
reason, we are obligated to pay Mr. Glosser his salary for the entire term of
this agreement and pay him any bonus earned as of the termination date. If we
terminate Mr. Glosser for cause, we have no obligation to Mr. Glosser other than
for salary and expenses earned or accrued and unpaid prior to the date of
termination. This agreement also contains a one year post-employment
non-competition and non-solicitation clause.

STOCK PLANS

1999 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK OPTION PLAN

Our 1999 Employee, Director and Consultant Stock Option Plan was approved
by our board of directors and by our stockholders in February 1999. Under this
plan, we may grant incentive stock options and nonqualified stock options. As of
February 28, 2000, a total of 4,767,500 shares of common stock had been reserved
for issuance under this plan. As of February 29, 2000, 215,517 shares had been
issued pursuant to options granted under this plan, 3,309,223 shares were
subject to outstanding options and 1,242,760 shares were available for future
grant.

Upon completion of this offering, this plan is to be administered by our
Compensation Committee. The Compensation Committee will determine the terms of
options granted pursuant to this plan, including:

- the exercise price and the number of shares subject to each option;

- the vesting schedule for options;

- the termination or cancellation provisions applicable to options; and

- the conditions relating to our right to reacquire shares subject to
options.

The maximum term of options granted under this plan is ten years.

If we are acquired, the Compensation Committee will provide that
outstanding options under this plan shall be: (1) assumed by the successor or
acquiring company; (2) exercised within a specified number of days or the
options will terminate; or (3) terminated in exchange for a cash payment equal
to the value of the option at the time we are acquired. If we are acquired, the
Compensation Committee may also provide that all outstanding options fully vest.

1997 EMPLOYEE STOCK OPTION PLAN

Our 1997 Employee Stock Option Plan was approved by our board of directors
and by our stockholders in February 1997. Under this plan we may grant incentive
stock options, nonqualified stock options and stock appreciation rights (SARs).
As of February 28, 2000, a total of 530,680 shares of common stock have been
reserved for issuance under this plan. Of these shares, 331,826 shares have been
issued pursuant to options granted under this plan, 198,854 shares were subject
to outstanding options and no shares were available for future grant.

- the term, exercise price and the number of shares subject to each option
or SAR;

- the form of consideration to be paid upon exercise of options and SARs;

- the vesting schedule for options and SARs; and

- the termination or cancellation provisions applicable to options and
SARs.

The maximum term of options granted under this plan is ten years.

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If we are acquired or in the event of a change of control, the Compensation
Committee may provide that certain options or SARs then outstanding for at least
one year shall receive upon exercise an amount equal to the fair market value of
the consideration to be received per share upon acquisition or change of control
minus the applicable exercise price multiplied by the number of shares subject
to such option or SAR. The Compensation Committee may provide that this amount
may be paid in cash, in the kind of property payable in such merger or change of
control or by a combination of cash and property.

401(k) PLAN

We maintain a retirement and deferred savings plan for our employees that
is intended to qualify as a tax-qualified plan under the Internal Revenue Code.
The 401(k) Plan provides that each participant may contribute up to 15% of their
salary up to a statutory limit, which is $10,500 in calendar year 2000. Under
this Plan we may match up to 25% of employee contributions, up to a maximum of
4% of an employee's compensation.

LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION

The Delaware General Corporation Law authorizes corporations to limit or
eliminate, subject to certain conditions, the personal liability of directors to
corporations and their stockholders for monetary damages for breach of their
fiduciary duties. Our certificate of incorporation limits the liability of our
directors to the fullest extent permitted by Delaware law.

Our certificate of incorporation and bylaws also provide that we will
indemnify any of our directors and officers who, by reason of the fact that he
or she is one of our officers or directors, is involved in a legal proceeding of
any nature. We will repay certain expenses incurred by a director or officer in
connection with any civil or criminal action or proceeding, specifically
including actions by us or in our name (derivative suits). Such indemnifiable
expenses include, to the maximum extent permitted by law, attorney's fees,
judgments, civil or criminal fines, settlement amounts and other expenses
customarily incurred in connection with legal proceedings. A director or officer
will not receive indemnification if he or she is found not to have acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
our best interest.

Such limitation of liability and indemnification does not affect the
availability of equitable remedies. In addition, we have been advised that in
the opinion of the SEC, indemnification for liabilities arising under the
Securities Act is against public policy as expressed in the Securities Act and
is therefore unenforceable.

There is no pending litigation or proceeding involving any of our
directors, officers, employees or agents in which indemnification will be
required or permitted. We are not aware of any threatened litigation or
proceeding that may result in a claim for such indemnification.

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CERTAIN TRANSACTIONS

Stock Purchases. The following executive officers, directors or holders of
more than five percent of our voting securities purchased securities in the
amounts as of the dates set forth below. Each share of our Series A-1, Series
A-2, Series B-1, and Series B-2 preferred stock is convertible into five shares
of our common stock. Each share of our Series C preferred stock is convertible
into 1.25 shares of our common stock. In addition, if the initial public
offering price is below $14.35 per share, the Series C preferred stockholders
are entitled to anti-dilution rights which increase the number of shares of
common stock into which each share of Series C preferred stock is convertible.
If the initial public offering price is below $14.35 per share, each share of
Series C preferred stock is convertible into a number of shares of common stock
equal to 1.25 multiplied by a fraction the numerator of which is $14.35 and the
denominator of which is the initial public offering price. Based on an assumed
initial public offering price of $11.00 per share, each share of Series C
preferred stock is convertible into 1.63 shares of common stock.

PREFERRED STOCK
COMMON ---------------------------------------------------------------
STOCK SERIES A-1 SERIES A-2 SERIES B-1 SERIES B-2 SERIES C
---------- ---------- ---------- ---------- ---------- -----------

DIRECTORS AND EXECUTIVE
OFFICERS
Daniel A. Pelson.......... 3,355,000 -- -- -- -- 9,756
Albert G. Pastino......... -- -- -- -- -- 7,317
Frank Harrison............ -- -- -- 2,828 -- 2,439
William S. Peabody(1)..... -- -- -- 24,193 -- 36,585
Samantha McCuen........... -- -- -- 4,839 -- --
Concrete Media, Inc.(2)... -- -- -- -- -- 4,878
5% STOCKHOLDERS
Bechtel Enterprises
Holdings, Inc.(3)....... -- 600,000 125,000 -- -- 507,317
Sandler Capital
Management(4)........... -- -- -- 459,677 -- 317,072
Highland Capital
Partners................ -- -- -- 483,871 -- 341,463
Oak Investment Partners
VIII, Limited
Partnership............. -- -- -- -- 268,818 195,122
Moore Capital Management,
Inc.(5)................. -- -- -- -- -- 975,610
Price Per Share........... $.00002 $2.50 $3.60 $6.20 $7.44 $10.25
Date(s) of Purchase....... 9/1/96 1/10/97 2/22/99 2/23/99 3/1/99 11/17/99,
11/23/99
and 12/6/99

- ------------

(1) The 36,585 shares of Series C preferred stock purchased by Mr. Peabody
consist of 16,097 shares purchased by Peabody Sabot Ventures, 19,513 shares
purchased by Peabody Family Ventures and 975 shares purchased by Caribou
Ventures. Mr. Peabody, one of our directors, is the Managing General Partner
of each of these entities.

(2) Dan Pelson, our President and Chief Executive Officer, Jane Mount, our
Executive Vice President, Frank Harrison, our Senior Vice President of
Corporate Development, and Bechtel Enterprises Holdings, Inc., a five
percent stockholder, own a total of 52% of the stock of this company.

(3) Robert Dove, one of our directors, is an Executive Vice President and
Managing Director of Bechtel Enterprises Holdings, Inc.

(4) Samantha McCuen, one of our directors, is a Managing Director of Sandler
Capital Management.

(5) Alan Colner, one of our directors, is Managing Director, Private Equity
Investments of Moore Capital Management, Inc.

We have entered into the following agreements and transactions with our
executive officers, directors and holders of more than five percent of our
voting securities:

Amended and Restated Registration Rights Agreement. Bolt, Daniel A.
Pelson, our President and Chief Executive Officer, the preferred stockholders
listed above and other stockholders have entered into an agreement, pursuant to
which they will have registration rights with respect to their shares of common
stock following this offering. See "Description of Capital Stock -- Registration
Rights" on page 55 for a more detailed description of the terms of this
agreement.

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Sale of custom publishing division. On December 30, 1998, we sold our
custom publishing division that provided Web site development services to third
parties to Concrete Media Construction, LLC. In consideration we received:

- A promissory note in the amount of $315,000, bearing interest at a rate
equal to the Federal Rate, as defined by the Internal Revenue Code. This
note is due and payable in full on December 31, 2001.

- A promissory note in the amount of $105,000, bearing interest at the
Federal Rate. This note was guaranteed by the individuals and entity
listed below and was due and payable in full on January 15, 1999. It was
paid in full on January 29, 1999.

At the time of this transaction, Dan Pelson, our President and Chief Executive
Officer, Jane Mount, our Executive Vice President, Frank Harrison, our Senior
Vice President of Corporate Development, and Bechtel Enterprises Holdings, Inc.,
a five percent stockholder, held a total of 87% of the equity interest in
Concrete Media Construction.

After this transaction, we rented space and provided financial,
administrative and accounting services to Concrete Media Construction. Concrete
Media Construction also provided the services of an information services
employee to us. Concrete Media Construction has paid us about $103,000 for rent
and the financial, administrative and accounting services we have provided. We
have paid Concrete Media Construction about $25,000 for the services they have
provided to us. We believe the amounts paid by Concrete Media Construction to us
and the amounts paid by us to Concrete Media Construction represent the fair
value of the services provided by each party. The amount paid to us for rent was
based on the percentage of the rented space allocated to Concrete Media
Construction multiplied by the base rent. The amount paid for services received
by each company was based upon the market rate for these services at the time
they were delivered. In addition, in 1999 we paid Concrete Media Construction
about $403,000 to develop Web sites for two of our advertising customers.

On October 1, 1999, Concrete Media Construction, LLC was reorganized as a
Delaware corporation and renamed Concrete Media, Inc. The officers and five
percent stockholder mentioned above currently hold about 52% of the equity of
Concrete Media, Inc. We are currently providing only minimal administrative
services to Concrete Media, Inc.

Sale of Girls On division. On January 29, 1999, we sold all of the assets
(about $52,000) of our Girls On division to Girls On, Inc., a wholly-owned
subsidiary of Concrete Media Construction, in exchange for the assumption by
Girls On, Inc. of current liabilities of about $107,000 and all future
liabilities of this division. The agreement for this sale also included a
provision entitling us to receive additional contingent consideration if Girls
On, Inc. was sold by Concrete Media Construction to a third party. On August 5,
1999, Concrete Media Construction sold Girls On, Inc. to Oxygen Media, LLC.
Pursuant to the contingent consideration provision of the agreement, we received
$386,000 in cash as well as equity securities in Oxygen Media valued at
$1,050,000.

Bechtel Enterprises Holding, Inc. On January 22, 1998, in exchange for a
$500,000 loan we received from Bechtel, we issued a convertible promissory note
to Bechtel in the principal amount of $500,000 with an interest rate of ten
percent per year. This note was due and payable in full upon the demand of
Bechtel at any time after July 22, 1998. In February 1999, this note was
converted in exchange for:

- $52,466 in cash as full and final consideration for the payment of the
interest on this note;

- $50,000 in cash as a payment of a portion of the principal of this note;
and

- 125,000 shares of our Series A-2 Convertible Preferred Stock.

Bechtel is a five percent stockholder and Robert Dove, one of our directors, is
an Executive Vice President and Managing Director of Bechtel.

The per share prices of our preferred stock were based on negotiations
between Bolt and unaffiliated third parties. In addition, based on prevailing
market conditions at the time of the other transactions described above, we
believe that all of these transactions were made on terms no less favorable to
Bolt than could have been obtained from unaffiliated third parties. All future
transactions between Bolt and its officers, directors, principal stockholders
and their affiliates will be approved by a majority of the board of directors,
including a majority of the independent and disinterested directors, and will
continue to be on terms no less favorable to Bolt than could be obtained from
unaffiliated third parties.

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of February 29, 2000, and as adjusted to
reflect the sale of our common stock offered by this prospectus by:

- the current and former executive officers named in the Summary
Compensation Table;

- each of our directors;

- all of our current directors and executive officers as a group; and

- each stockholder known by us to own beneficially more than five percent
of our common stock.

Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting or investment power with respect to the securities. Shares
of common stock that may be acquired by an individual or group within 60 days of
February 29, 2000, pursuant to the exercise of options or warrants are deemed to
be outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the table.
Percentage of ownership is based on 21,181,985 shares of common stock
outstanding on February 29, 2000, which assumes the conversion of all
outstanding shares of preferred stock into common stock, and 24,881,985 shares
of common stock outstanding after the completion of this offering.

Except as indicated in footnotes to this table, we believe that the
stockholders named in this table have sole voting and investment power with
respect to all shares of common stock shown to be beneficially owned by them
based on information provided to us by such stockholders. Unless otherwise
indicated, the address for each director and executive officer listed is: c/o
Bolt, Inc., 304 Hudson Street, 7th Floor, New York, NY 10013.

PERCENTAGE OF
COMMON STOCK
BENEFICIALLY OWNED
---------------------------
NUMBER OF SHARES BEFORE AFTER
BENEFICIAL OWNER BENEFICIALLY OWNED OFFERING OFFERING
- --------------------------------------------- ------------------ --------------- --------

DIRECTORS AND EXECUTIVE OFFICERS
Daniel A. Pelson(1).......................... 3,747,366 17.7% 15.1%
Jane Mount(2)................................ 641,210 3.0 2.6
Frank Harrison............................... 118,117 * *
Jeanne Sachs(3).............................. 37,500 * *
Robert Dove(4)............................... 4,460,342 21.1 17.9
Samantha McCuen(5)........................... 2,839,694 13.4 11.4
Alan Colner(6)............................... 1,591,130 7.5 6.4
William S. Peabody(7)........................ 195,755 * *
All current executive officers and directors
as a group (14 persons)(8)................. 13,724,722 63.6 54.3

FIVE PERCENT STOCKHOLDERS
Bechtel Enterprises Holdings, Inc.(4)........ 4,460,342 21.1 17.9
Highland Capital Partners(9)................. 2,976,249 14.1 12.0
Sandler Capital Management(5)................ 2,815,499 13.3 11.3
Oak Associates VIII, LLC(10)................. 1,662,315 7.8 6.7
Moore Capital Management, Inc.(6)............ 1,591,130 7.5 6.4

- ------------
* Represents beneficial ownership of less than 1% of the shares of Common
Stock.

(1) Includes 7,955 shares held by Concrete Media, Inc. Mr. Pelson owns 24% of
the equity securities of Concrete Media. He disclaims beneficial ownership
of these shares except to the extent of his proportional pecuniary interest
in these shares.

(2) Includes 242,047 shares issuable pursuant to options exercisable within 60
days of February 29, 2000.

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(3) Consists of 37,500 shares issuable pursuant to options exercisable within
60 days of February 29, 2000.

(4) Consists of 4,452,387 shares held by Bechtel Enterprises Holdings, Inc. and
7,955 shares held by Concrete Media, Inc. Bechtel owns 24% of the equity
securities of Concrete Media. Bechtel disclaims beneficial ownership of
these shares except to the extent of its proportional pecuniary interest in
these shares. Mr. Dove is an Executive Vice President and Managing Director
of Bechtel and disclaims beneficial ownership of these shares. Bechtel is
located at 50 California Street--Suite 2200, San Francisco, California
94111.

(5) Includes 1,870,765 shares held by Sandler Capital Partners IV, L.P.,
765,752 shares held by Sandler Capital Partners IV FTE, L.P. and 179,000
shares held by Sandler Internet Partners, L.P. Ms. McCuen is a Managing
Director of Sandler Capital Management and disclaims beneficial ownership
of these shares except to the extent of her proportional pecuniary interest
in these shares. Sandler Capital Management is located at 767 Fifth
Avenue--45th Floor, New York, New York 10153.

(6) Includes 1,272,904 shares held by Moore Global Investments, Ltd and 318,226
shares held by Remington Investments Strategies, L.P. Moore Capital
Management, Inc., a Connecticut corporation, is vested with investment
discretion with respect to portfolio assets held for the account of Moore
Global Investments. Moore Capital Advisors, L.L.C., a New York limited
liability company, is the sole general partner of Remington Investment
Strategies. Mr. Louis M. Bacon is the majority shareholder of Moore Capital
Management, Inc., and is the majority equity holder of Moore Capital
Advisors, L.L.C. As a result, Mr. Bacon, though he disclaims beneficial
ownership of the shares, may be deemed to be the beneficial owner of the
aggregate shares held by Moore Global Investments and Remington Investment
Strategies. Alan Colner is Managing Director, Private Equity Investments of
Moore Capital Management, Inc., which is the trading advisor of Moore
Global Investments. He is also a director of Bolt. Mr. Colner does not have
voting or investment power with respect to the shares of securities owned
by Moore Global Investments or Remington Investment Strategies, and
disclaims beneficial ownership of the shares. Moore Capital Management,
Inc. is located at 1251 Avenue of the Americas, New York, New York 10020.

(7) Includes 92,303 shares held by Peabody Family Ventures of which Mr. Peabody
is the Managing General Partner, 66,572 shares held by Peabody Sabot
Ventures of which Mr. Peabody is the Managing General Partner and 1,590
shares held by Caribou Ventures of which Mr. Peabody is the Managing
General Partner. Also includes 15,125 shares issuable pursuant to options
exercisable within 60 days of February 29, 2000.

(8) Includes 9,027,436 shares held by entities affiliated with our directors
and executive officers. Also includes 396,235 shares issuable upon options
exercisable within 60 days of February 29, 2000. See footnotes 1 through 7
above.

(9) Consists of 2,857,198 shares held by Highland Capital Partners IV Limited
Partnership and 119,051 shares held by Highland Entrepreneurs Fund IV
Limited Partnership. Highland Capital Partners manages these two entities.
Highland Capital Partners IV Limited Partnership and Highland Entrepreneurs
Fund IV Limited Partnership each disclaim beneficial ownership of the
shares owned by the other entity. Highland Capital Partners is located at 2
International Place--22nd Floor, Boston, Massachusetts 02110.

(10) Consists of 1,630,730 shares held by Oak Investment Partners VIII, Limited
Partnership and 31,585 shares held by Oak VIII Affiliates Fund, Limited
Partnership. Oak Associates VIII, LLC is the managing partner of each of
these entities. The managing members of Oak Associates VIII, LLC are Ann H.
Lamont, Edward Glassmayer, Gerard Gallagher, Bandel Carano and Fred Harman.
Each of these individuals disclaims beneficial ownership of these shares
except to the extent of his or her proportional pecuniary interest in these
shares. Oak Associates VIII, LLC is located at One Gorham Island, Westport,
Connecticut 06880.

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DESCRIPTION OF CAPITAL STOCK

Upon completion of this offering, we will be authorized to issue 50,000,000
shares of common stock, $.001 par value per share, and 5,000,000 shares of
preferred stock, $.001 par value per share, and there will be 24,881,985 shares
of common stock and no shares of preferred stock outstanding. Assuming the
conversion of our preferred stock, as of February 29, 2000, we had 21,181,985
shares of common stock outstanding held of record by 50 stockholders. As of
February 28, 2000, there were outstanding options to purchase 3,508,077 shares
of common stock and outstanding warrants to purchase 150,709 shares of common
stock.

COMMON STOCK

Holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders, and do not have
cumulative voting rights. Subject to preferences that may be applicable to any
outstanding shares of preferred stock, holders of common stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by
our board of directors out of funds legally available for dividend payments. All
outstanding shares of common stock are fully paid and nonassessable, and the
holders of common stock have no preferences or rights of conversion, exchange or
pre-emption. In the event of any liquidation, dissolution or winding-up of our
affairs, holders of common stock will be entitled to share ratably in our assets
that are remaining after payment or provision for payment of all of our debts
and obligations and after liquidation payments to holders of outstanding shares
of preferred stock, if any.

PREFERRED STOCK

The preferred stock, if issued, would have priority over the common stock
with respect to dividends and other distributions, including the distribution of
assets upon liquidation. Our board of directors has the authority, without
further stockholder authorization, to issue from time to time shares of
preferred stock in one or more series and to fix the terms, limitations,
relative rights and preferences and variations of each series. Although we have
no present plans to issue any shares of preferred stock, the issuance of shares
of preferred stock, or the issuance of rights to purchase such shares, could
decrease the amount of earnings and assets available for distribution to the
holders of common stock, could adversely affect the rights and powers, including
voting rights, of the common stock, and could have the effect of delaying,
deterring or preventing a change in control of Bolt or an unsolicited
acquisition proposal.

WARRANTS

As of February 28, 2000, the following warrants were outstanding.

- A warrant to purchase 50,000 shares of our common stock at an exercise
price of $0.02 per share. This warrant expires on April 22, 2009.

- A warrant to purchase 1,975 shares of our Series B-3 Convertible
Preferred Stock at an exercise price of $30.37 per share. Upon
completion of this offering, this warrant will automatically convert
into a warrant to purchase 9,875 shares of our common stock at an
exercise price of $6.07 per share. This warrant expires on August 31,
2006.

- A warrant to purchase 20,834 shares of our common stock at an exercise
price of $8.20 per share. This warrant expires on January 28, 2010.

- A warrant to purchase 70,000 shares of our common stock at an exercise
price of $14.35 per share. The warrant expires on February 16, 2010.

Each of these warrants contains provisions for the adjustment of the exercise
price and the aggregate number of shares issuable upon the exercise of the
warrant in the event of stock dividends, stock splits, reorganizations, and
reclassifications and consolidations.

REGISTRATION RIGHTS

The holders of the following shares of our common stock are entitled to
certain registration rights with respect to those shares. These registration
rights are subject to certain conditions and limitations, including the right of
the underwriters of an offering to limit the number of shares included in any
such registration under certain circumstances. All expenses incurred in
connection with registrations effected in connection with the following rights
will be borne by us.

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63

Demand Rights. Beginning 180 days after completion of this offering:

- The holders of 14,333,688 shares of common stock and 867,962 shares of
common stock issuable upon the exercise of outstanding options and
warrants will have certain rights to cause us to register those shares
under the Securities Act. We may be required to effect up to three such
registrations.

- The holders of 6,700,117 shares of common stock and 70,000 shares of
common stock issuable upon the exercise of outstanding warrants, will
have the right, on one occasion, to cause us to register those shares
under the Securities Act.

Stockholders with these registration rights who are not part of an initial
registration demand are entitled to notice and are entitled to include their
shares of common stock in the registration.

Piggyback Rights. If at any time after this offering we propose to
register any of our equity securities under the Securities Act, other than in
connection with

- a registration relating solely to our stock option plans or other
employee benefit plans, or

- a registration relating solely to a business combination or merger
involving us,

the holders of 21,033,805 shares of common stock and 937,962 shares of common
stock issuable upon the exercise of outstanding options and warrants are
entitled to notice of such registration and are entitled to include their common
stock in the registration.

Shelf Registration Rights. In addition, the holders of 21,033,805 shares
of common stock and 937,962 shares of common stock issuable upon the exercise of
outstanding options and warrants will have the right to cause us to register
these shares on a Form S-3, provided that we are eligible to use this form.
There is no limit to the number of registrations on Form S-3 that we may be
required to effect, except that we will not be required to effect such a
registration unless the aggregate offering price of the shares to be registered,
based on the then current market price, is at least $1.0 million. Stockholders
with these registration rights who are not part of an initial registration
demand are entitled to notice and are entitled to include their shares of common
stock in the registration.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

The provisions of Delaware law and of our certificate of incorporation and
by-laws discussed below could discourage or make it more difficult to accomplish
a proxy contest or other change in our management or the acquisition of control
by a holder of a substantial amount of our voting stock. It is possible that
these provisions could make it more difficult to accomplish, or could deter,
transactions that stockholders may otherwise consider to be in their best
interests or the best interests of Bolt.

Delaware Statutory Business Combinations Provision. We are subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporations
Law. In general, Section 203 prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is, or the
transaction in which the person became an interested stockholder was, approved
in a prescribed manner or another prescribed exception applies. For purposes of
Section 203, a "business combination" is defined broadly to include a merger,
asset sale or other transaction resulting in a financial benefit to the
interested stockholder, and, subject to certain exceptions, an "interested
stockholder" is a person who, together with his or her affiliates and
associates, owns (or within three years prior, did own) 15% or more of the
corporation's voting stock.

Classified Board of Directors. Upon completion of this offering, our board
of directors will be divided into three classes. Each year the stockholders will
elect the members of one of the three classes to a three-year term of office.
All directors elected to our classified board of directors will serve until the
election and qualification of their respective successors or their earlier
resignation or removal. The board of directors is authorized to create new
directorships and to fill such positions so created and is permitted to specify
the class to which any such new position is assigned. The person filling such
position would serve for the term applicable to that class. The board of
directors (or its remaining members, even if less than a quorum) is also
empowered to fill vacancies on the board of directors occurring for any reason
for the remainder of the term of the class of

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64

directors in which the vacancy occurred. Members of the board of directors may
only be removed for cause. These provisions are likely to increase the time
required for stockholders to change the composition of the board of directors.
For example, in general, at least two annual meetings will be necessary for
stockholders to effect a change in a majority of the members of the board of
directors.

Advance Notice Provisions for Stockholder Proposals and Stockholder
Nominations of Directors. Our by-laws provide that, for nominations to the
board of directors or for other business to be properly brought by a stockholder
before a meeting of stockholders, the stockholder must first have given timely
notice of the proposal in writing to our Secretary. For an annual meeting, a
stockholder's notice generally must be delivered not less than 45 days nor more
than 75 days prior to the anniversary of the mailing date of the proxy statement
for the previous year's annual meeting. For a special meeting, the notice must
be delivered not earlier than 90 days and not later than 60 days prior to the
special meeting or within ten days following the day on which public
announcement of the meeting is first made. Detailed requirements as to the form
of the notice and information required in the notice are specified in the
by-laws. If it is determined that business was not properly brought before a
meeting in accordance with our by-law provisions, such business will not be
conducted at the meeting.

Special Meetings of Stockholders. Special meetings of the stockholders may
be called only by our board of directors pursuant to a resolution adopted by a
majority of the total number of directors.

No Stockholder Action by Written Consent. Our certificate of incorporation
does not permit our stockholders to act by written consent. As a result, any
action to be effected by our stockholders must be effected at a duly called
annual or special meeting of the stockholders.

Super-Majority Stockholder Vote required for Certain Actions. The Delaware
General Corporation Law provides generally that the affirmative vote of a
majority of the shares entitled to vote on any matter is required to amend a
corporation's certificate of incorporation or by-laws, unless the corporation's
certificate of incorporation or by-laws, as the case may be, requires a greater
percentage. Our certificate of incorporation requires the affirmative vote of
the holders of at least 80% of our outstanding voting stock to amend or repeal
any of the provisions discussed in this section of this prospectus entitled
"Delaware Law and Certain Charter and By-law Provisions." This 80% stockholder
vote would be in addition to any separate class vote that might in the future be
required pursuant to the terms of any preferred stock that might then be
outstanding. A 80% vote is also required for any amendment to, or repeal of, our
by-laws by the stockholders. Our by-laws may be amended or repealed by a simple
majority vote of the board of directors.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock will be American
Stock Transfer and Trust Company.

LISTING

We will complete an application for listing our common stock on the Nasdaq
National Market under the symbol "BOLT."

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales of substantial amounts of our common stock in the public market
could adversely affect market prices prevailing from time to time. Furthermore,
because only a limited number of shares will be available for sale shortly after
this offering due to existing contractual and legal restrictions on resale as
described below, there may be sales of substantial amounts of our common stock
in the public market after the restrictions lapse. This may adversely affect the
prevailing market price and our ability to raise equity capital in the future.

Upon completion of this offering, we will have 24,881,985 shares of common
stock outstanding, assuming no exercise of options and warrants outstanding as
of February 28, 2000, and the conversion of all outstanding shares of preferred
stock. Of these shares, the 3,700,000 shares sold in this offering will be
freely transferable without restriction or registration under the Securities
Act, except for any shares purchased by one of our existing "affiliates," as
that term is defined in Rule 144 under the Securities Act. The remaining
21,181,985 shares of common stock existing are "restricted shares" as defined in
Rule 144. Restricted shares may be sold in the public market only if registered
or if they qualify for an exemption from registration under Rules 144 or 701 of
the Securities Act. As a result of the contractual 180-day lock-up period
described below and the provisions of Rules 144 and 701, these shares will be
available for sale in the public market as follows:

NUMBER OF SHARES DATE
- ------------------------------------------ ----------------------------------------------

0............................... On the date of this prospectus.
296,145................................ After 90 days from the date of this
prospectus.
14,185,723................................ After 180 days from the date of this
prospectus (subject, in some cases, to volume
limitations).
6,700,117................................ At various times after 180 days from the date
of this prospectus (subject, in some cases, to
volume limitations).

LOCK-UP AGREEMENTS

Bolt, our directors and executive officers and certain of our stockholders
and option holders have each agreed not to offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock or
any securities convertible into or exercisable or exchangeable for common stock,
for a period of 180 days after the date of this prospectus, without the prior
written consent of Morgan Stanley & Co. Incorporated, subject to limited
exceptions. Morgan Stanley & Co. Incorporated, however, may in its sole
discretion, at any time without notice, release all or any portion of the shares
subject to lock-up agreements.

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
this offering, a person, or persons whose shares are aggregated, who owns shares
that were purchased from us, or any affiliate, at least one year previously, is
entitled to sell within any three-month period a number of shares that does not
exceed the greater of 1% of our then-outstanding shares of common stock, which
will equal about 248,820 shares immediately after this offering, or the average
weekly trading volume of our common stock on the Nasdaq National Market during
the four calendar weeks preceding the filing of a notice of the sale on Form
144. Sales under Rule 144 are also subject to manner of sale provisions, notice
requirements and the availability of current public information about us. Any
person, or persons whose shares are aggregated who is not deemed to have been
one of our affiliates at any time during the three months preceding a sale, and
who owns shares within the definition of "restricted securities" under Rule 144
that were purchased from us, or any affiliate, at least two years previously,
would be entitled to sell shares under Rule 144(k) without regard to the volume
limitations, manner of sale provisions, public information requirements or
notice requirements.

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RULE 701

Subject to limitations on the aggregate offering price of a transaction and
other conditions, Rule 701 may be relied upon with respect to the resale of
securities originally purchased from us by our employees, directors, officers or
consultants prior to the date we become subject to the reporting requirements of
the Securities Exchange Act of 1934, or the Exchange Act, under written
compensatory benefit plans or written contracts relating to the compensation of
these persons. In addition, the Securities and Exchange Commission has indicated
that Rule 701 will apply to typical stock options granted by an issuer before it
becomes subject to the reporting requirements of the Exchange Act, along with
the shares acquired upon exercise of the options, including exercises after the
date of this prospectus. Securities issued in reliance on Rule 701 are
restricted securities and, subject to the contractual restrictions described
above, beginning 90 days after the date of this prospectus, may be sold by
persons other than affiliates subject only to the manner of sale provisions of
Rule 144 and by affiliates under Rule 144 without compliance with its minimum
holding period requirements.

REGISTRATION RIGHTS

Upon completion of this offering, the holders of 21,033,805 shares of
common stock and 937,962 shares of common stock issuable upon the exercise of
outstanding options and warrants shares of common stock or their transferees,
will be entitled to various rights with respect to the registration of these
shares under the Securities Act. Registration of these shares under the
Securities Act would result in these shares becoming freely tradable without
restriction under the Securities Act immediately upon the effectiveness of the
registration, except for shares purchased by affiliates. See "Description of
Capital Stock--Registration Rights" on page 55 for a more complete description
of these registration rights.

STOCK OPTIONS

As of February 28, 2000, options to purchase a total of 3,508,077 shares of
common stock under our stock option plans were outstanding and 816,066 were
exercisable. All of the shares subject to options are subject to lock-up
agreements. An additional 1,242,760 shares of common stock were available for
future option grants under our stock plans.

Upon completion of this offering, we intend to file a registration
statement under the Securities Act covering all shares of common stock subject
to outstanding options or issuable pursuant to our stock option plans. Subject
to Rule 144 volume limitations applicable to affiliates, shares registered under
any registration statements will be available for sale in the open market,
beginning 90 days after the date of the prospectus, except to the extent that
the shares are subject to vesting restrictions with us or the contractual
restrictions described above.

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UNDERWRITERS

Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the underwriters named below, for
whom Morgan Stanley & Co. Incorporated, Thomas Weisel Partners LLC and J.P.
Morgan Securities Inc. are acting as representatives, have severally agreed to
purchase and we have agreed to sell to them, the respective number of shares of
common stock set forth opposite the names of these underwriters below:

NUMBER OF
NAME SHARES
- ---- ---------

Morgan Stanley & Co. Incorporated...........................
Thomas Weisel Partners LLC..................................
J.P. Morgan Securities Inc..................................

--------
Total............................................. 3,700,000
========

Morgan Stanley Dean Witter Online, Inc., an affiliate of Morgan Stanley &
Co. Incorporated and facilitator of Internet distribution, is acting as a
selected dealer in connection with the offering.

The underwriters are offering the shares of common stock subject to their
acceptance of the shares from us and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters to pay for
and accept delivery of the shares of common stock offered by this prospectus are
subject to the approval of specified legal matters by their counsel and to other
conditions. The underwriters are obligated to take and pay for all of the shares
of common stock offered by this prospectus, except those shares covered by the
over-allotment option described below, if any shares are taken.

The underwriters initially propose to offer part of the shares of common
stock directly to the public at the public offering price set forth on the cover
page of this prospectus and a portion to some dealers at a price that represents
a concession not in excess of $ per share under the public offering price.
Any underwriter may allow, and these dealers may reallow, a concession not in
excess of $ per share to other underwriters or to other dealers. After the
initial offering of the shares of common stock, the offering price and other
selling terms may from time to time be varied by the representatives.

We have granted to the underwriters an option, exercisable for 30 days from
the date of this prospectus, to purchase up to an aggregate of 555,000
additional shares at the public offering price set forth on the cover page of
this prospectus, less underwriting discounts and commissions. The underwriters
may exercise this option solely for the purpose of covering over-allotments, if
any, made in connection with the offering of the shares offered by this
prospectus. To the extent this option is exercised, each underwriter will become
obligated, subject to specified conditions, to purchase about the same
percentage of additional shares as the number set forth next to the
underwriter's name in the preceding table bears to the total number of shares
set forth next to the names of all underwriters in the preceding table. If the
underwriters exercise the over-allotment option in full, the total price to the
public for this offering would be $ , the total underwriting discounts
and commissions would be $ and the total proceeds to Bolt would be
$ .

The underwriters have informed us that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
common stock offered by them.

At our request, the underwriters have reserved up to 222,000 shares of
common stock offered by this prospectus for sale at the initial public offering
price to some of our directors, officers, employees, business associates and
related persons of Bolt. The number of shares available for sale to the general
public will be reduced to the extent that these persons purchase these reserved
shares. Any reserved shares not so purchased will be offered by the underwriters
to the general public on the same basis as the other shares offered by this
prospectus.

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Bolt has applied to list the common stock on the Nasdaq National Market
under the symbol "BOLT."

Bolt, our directors and executive officers and certain of our stockholders
and option holders have each agreed that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the underwriters, he, she or it
will not, during the period ending 180 days after the date of this prospectus:

- offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock; or

- enter into any swap or other agreement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the
common stock,

whether any transaction described above is to be settled by delivery of common
stock or such other securities, in cash or otherwise.

The restrictions described in the immediately preceding paragraph do not
apply to:

- the issuance by us of shares of common stock upon the exercise of an
option or a warrant or the conversion of a security outstanding on the
date of this prospectus of which the underwriters have been advised in
writing; or

- transactions by any person other than Bolt relating to shares of common
stock or other securities acquired in open market transactions after the
completion of this offering.

In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position in the common stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the common stock, the underwriters may bid for, and purchase, shares of
common stock in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the
common stock in the offering, if the syndicate repurchases previously
distributed shares of common stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the common stock above independent
market levels. The underwriters are not required to engage in these activities,
and may end any of these activities at any time.

Bolt and the underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act.

Thomas Weisel Partners LLC, one of the representatives of the underwriters,
was organized and registered as a broker-dealer in December 1998. Since December
1998, Thomas Weisel Partners has been named as a lead or co-manager on 131 filed
public offerings of equity securities, of which 97 have been completed, and has
acted as a syndicate member in an additional 64 public offerings of equity
securities. Thomas Weisel Partners does not have any material relationship with
us or any of our officers, directors or other controlling persons, except with
respect to its contractual relationship with us pursuant to the underwriting
agreement entered into in connection with this offering.

PRICING OF THE OFFERING

Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price will be determined by
negotiations between us and the representatives of the underwriters. Among the
factors to be considered in determining the initial public offering price will
be:

- the future prospects of Bolt and its industry in general;

- sales, earnings and certain other financial and operating information of
Bolt in recent periods; and

- the price-earnings ratios, price-sales ratios, market prices of
securities and certain financial and operating information of companies
engaged in activities similar to those of Bolt.

The estimated initial public offering price range set forth on the cover
page of this prospectus is subject to change as a result of market conditions
and other factors.

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LEGAL MATTERS

The validity of the issuance of the common stock offered by us in this
offering will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Boston, Massachusetts. As of the date of this prospectus, persons
and entities affiliated with Mintz Levin own an aggregate of 15,916 shares of
our common stock. The underwriters are being represented by Davis Polk &
Wardwell, New York, New York.

EXPERTS

The financial statements of Bolt as of December 31, 1999 and 1998 and for
the years ended December 31, 1999, 1998 and 1997, included in this prospectus,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report appearing in this prospectus and are included in reliance upon the
report of that firm given upon their authority as experts in accounting and
auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the
Securities Act, with respect to the common stock offered by this prospectus.
This prospectus, which is part of the registration statement, omits certain
information, exhibits, schedules and undertakings set forth in the registration
statement. For further information pertaining to us and our common stock,
reference is made to the registration statement and the exhibits and schedules
to the registration statement. Statements contained in this prospectus as to the
contents or provisions of any documents referred to in this prospectus are not
necessarily complete, and in each instance where a copy of the document has been
filed as an exhibit to the registration statement, reference is made to the
exhibit for a more complete description of the matters involved.

You may read and copy all or any portion of the registration statement
without charge at the office of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of the registration statement may be obtained from the SEC at
prescribed rates from the Public Reference Section of the SEC at such address,
and at the SEC's regional offices located at 7 World Trade Center, 13th Floor,
New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. In addition, registration statements and certain
other filings made with the SEC electronically are publicly available through
the SEC's Web site at http://www.sec.gov. The registration statement, including
all exhibits and amendments to the registration statement, has been filed
electronically with the SEC.

62
70

BOLT, INC.

INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report................................ F-2
Balance Sheets as of December 31, 1998 and 1999............. F-3
Statements of Operations for the years ended December 31,
1997, 1998 and 1999....................................... F-4
Statements of Stockholders' Equity (Deficiency) for the
years ended December 31, 1997, 1998 and 1999.............. F-5
Statements of Cash Flows for the years ended December 31,
1997, 1998 and 1999....................................... F-6
Notes to Financial Statements............................... F-7

F-1
71

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Bolt, Inc.

We have audited the accompanying balance sheets of Bolt, Inc. (the
"Company") as of December 31, 1998 and 1999, and the related statements of
operations, stockholders' equity (deficiency) and cash flows for each of the
three years in the period ended December 31, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1998 and 1999,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1999, in conformity with generally accepted
accounting principles.

/s/ DELOITTE & TOUCHE LLP

New York, New York

January 28, 2000 (February 29, 2000 as to Note 16)

F-2
72

BOLT, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

PRO FORMA
DECEMBER 31, DECEMBER 31, STOCKHOLDERS' EQUITY
1998 1999 AT DECEMBER 31, 1999
------------ ------------ --------------------
(UNAUDITED)

ASSETS

Current assets:
Cash and cash equivalents................................. $ 194 $ 37,148
Accounts receivable, net of allowance for doubtful
accounts of $11 and $84 as of December 31, 1998 and
1999, respectively...................................... 338 1,896
Prepaid expenses and other current assets................. -- 692
------- --------
Total current assets............................... 532 39,736
Property and equipment, net................................. 454 2,821
Investments................................................. -- 1,050
Other assets................................................ 47 927
------- --------
Total assets................................................ $ 1,033 $ 44,534
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Accounts payable.......................................... $ 246 $ 3,553
Accrued expenses.......................................... 234 3,000
Current portion of note payable and capital lease
obligations............................................. 182 577
------- --------
Total current liabilities.......................... 662 7,130
Deferred revenues........................................... 53 28
Convertible promissory note................................. 450 --
Note payable, less current portion.......................... 320 --
Capital lease obligations, less current portion............. 178 514
------- --------
Total liabilities........................................... 1,663 7,672
------- --------
Commitments
Redeemable convertible preferred stock:
Series B-1 convertible preferred stock, $.001 par value;
no shares authorized, issued and outstanding, 1998;
1,048,387 shares authorized, issued and outstanding,
1999; and no shares authorized, issued or outstanding,
1999 pro forma.......................................... -- 6,132
Series B-2 convertible preferred stock, $.001 par value;
no shares authorized, issued and outstanding, 1998;
268,818 shares authorized, issued and outstanding, 1999;
and no shares authorized, issued or outstanding, 1999
pro forma............................................... -- 1,887
Series C convertible preferred stock, $.001 par value; no
shares authorized, issued and outstanding, 1998;
4,400,000 shares authorized, 3,787,801 issued and
outstanding, 1999; and no shares authorized, issued or
outstanding, 1999 pro forma............................. -- 38,693
------- --------
Total redeemable convertible preferred stock ............... -- 46,712
------- --------
Stockholders' equity (deficiency):
Common stock, $.001 par value; 16,000,000 shares
authorized, 5,500,000 shares issued and 3,723,500 shares
outstanding, 1998; 30,000,000 shares authorized,
5,548,180 shares issued and 3,771,680 shares
outstanding, 1999; and 30,000,000 shares authorized,
21,936,747 shares issued, and 20,160,247 shares
outstanding, 1999 pro forma ............................ 6 6 22
Series A-1 convertible preferred stock, $.001 par value;
600,000 shares authorized, issued and outstanding, 1998
and 1999 and no shares authorized, issued or
outstanding, 1999 pro forma............................. 1 1 --
Series A-2 convertible preferred stock, $.001 par value;
no shares authorized, issued and outstanding, 1998;
125,000 shares authorized, issued and outstanding, 1999
and no shares authorized, issued or outstanding, 1999
pro forma............................................... -- -- --
Additional paid-in capital................................ 1,985 8,987 55,684
Warrants.................................................. -- 995 995
Deferred financing costs.................................. -- (71) (71)
Accumulated deficit....................................... (1,741) (14,658) (14,658)
Deferred compensation..................................... -- (4,334) (4,334)
Note receivable from related party........................ (420) (315) (315)
Treasury stock............................................ (461) (461) (461)
------- -------- --------
Total stockholders' equity (deficiency)................... (630) (9,850) $ 36,862
------- -------- ========
Total liabilities and stockholders' equity
(deficiency)..................................... $ 1,033 $ 44,534
======= ========

See notes to financial statements.
F-3
73

BOLT, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

YEAR ENDED DECEMBER 31,
---------------------------------------
1997 1998 1999
---------- ---------- -----------

Bolt revenues........................................ $ 32 $ 404 $ 4,362
Revenues related to the Girls On and custom
publishing divisions............................... 446 2,281 38
---------- ---------- -----------
Total revenues............................. 478 2,685 4,400
---------- ---------- -----------
Costs and expenses:
Production and technology.......................... 810 1,138 3,526
E-commerce......................................... -- -- 1,119
Sales and marketing................................ 287 630 9,084
General and administrative......................... 549 1,327 1,766
Depreciation and amortization...................... 25 75 536
Stock-based compensation........................... -- -- 3,007
---------- ---------- -----------
Total costs and expenses................... 1,671 3,170 19,038
---------- ---------- -----------
Loss from operations................................. (1,193) (485) (14,638)
Other income (expense):
Interest income.................................... 42 7 418
Interest expense................................... -- (60) (133)
Gain on sale of Girls On........................... -- -- 1,436
---------- ---------- -----------
Net loss............................................. $ (1,151) $ (538) $ (12,917)
========== ========== ===========
Basic loss per share................................. $ (.21) $ (.10) $ (3.43)
========== ========== ===========
Weighted average number of shares of common stock
outstanding........................................ 5,500,000 5,461,063 3,765,080
========== ========== ===========
Pro forma basic loss per share (unaudited)........... $ (.95)
===========
Pro forma weighted average number of shares of common
stock outstanding (unaudited)...................... 13,618,008
===========

See notes to financial statements.

F-4
74

BOLT, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
(IN THOUSANDS, EXCEPT SHARE DATA)

PREFERRED STOCK
-----------------------------------
COMMON STOCK SERIES A-1 SERIES A-2 ADDITIONAL
------------------ ---------------- ---------------- PAID IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
------ ------ ------ ------ ------ ------ ----------

Balance at August 15, 1996 (date of inception).... -- $-- -- $-- -- $-- $ --
Issuance of common stock to founders.............. 5,500,000 6 -- -- -- -- 92
Net loss.......................................... -- -- -- -- -- -- --
--------- -- ------- -- ------- -- ------
Balance at December 31, 1996...................... 5,500,000 6 -- -- -- -- 92
Issuance of Series A-1 convertible preferred
stock............................................ -- -- 600,000 1 -- -- 1,499
Net loss.......................................... -- -- -- -- -- -- --
--------- -- ------- -- ------- -- ------
Balance at December 31, 1997...................... 5,500,000 6 600,000 1 -- -- 1,591
Purchase of founders common stock................. -- -- -- -- -- -- --
Sale of custom publishing division to related
party............................................ -- -- -- -- -- -- 394
Net loss.......................................... -- -- -- -- -- -- --
--------- -- ------- -- ------- -- ------
Balance at December 31, 1998...................... 5,500,000 6 600,000 1 -- -- 1,985
Issuance of Series A-2 convertible preferred stock
in exchange for convertible note................. -- -- -- -- 125,000 -- 450
Sale of Girls On division......................... -- -- -- -- -- -- 55
Issuance of common stock.......................... 48,180 -- -- -- -- -- 24
Proceeds on payment of note receivable............ -- -- -- -- -- -- --
Issuance of warrants to placement agent to
purchase common stock............................ -- -- -- -- -- -- (868)
Deferred compensation on stock options............ -- -- -- -- -- -- 7,341
Amortization of deferred compensation............. -- -- -- -- -- -- --
Issuance of warrants to purchase Series B-2
preferred stock in connection with credit
facility......................................... -- -- -- -- -- -- --
Amortization of deferred financing costs.......... -- -- -- -- -- -- --
Net loss.......................................... -- -- -- -- -- -- --
--------- -- ------- -- ------- -- ------
Balance at December 31, 1999...................... 5,548,180 $6 600,000 $1 125,000 $-- $8,987
========= == ======= == ======= == ======

NOTE
RECEIVABLE
DEFERRED FROM
FINANCING ACCUMULATED DEFERRED RELATED
WARRANTS COSTS DEFICIT COMPENSATION PARTY
-------- --------- ----------- ------------ ----------

Balance at August 15, 1996 (date of inception).... $ -- $ -- $ -- $ -- $ --
Issuance of common stock to founders.............. -- -- -- -- --
Net loss.......................................... -- -- (52) -- --
---- ---- -------- ------- -----
Balance at December 31, 1996...................... -- -- (52) -- --
Issuance of Series A-1 convertible preferred
stock............................................ -- -- -- -- --
Net loss.......................................... -- -- (1,151) -- --
---- ---- -------- ------- -----
Balance at December 31, 1997...................... -- -- (1,203) -- --
Purchase of founders common stock................. -- -- -- -- --
Sale of custom publishing division to related
party............................................ -- -- -- -- (420)
Net loss.......................................... -- -- (538) -- --
---- ---- -------- ------- -----
Balance at December 31, 1998...................... -- -- (1,741) -- (420)
Issuance of Series A-2 convertible preferred stock
in exchange for convertible note................. -- -- -- -- --
Sale of Girls On division......................... -- -- -- -- --
Issuance of common stock.......................... -- -- -- -- --
Proceeds on payment of note receivable............ -- -- -- -- 105
Issuance of warrants to placement agent to
purchase common stock............................ 868 -- -- -- --
Deferred compensation on stock options............ -- -- -- (6,537) --
Amortization of deferred compensation............. -- -- -- 2,203 --
Issuance of warrants to purchase Series B-2
preferred stock in connection with credit
facility......................................... 127 (127) -- -- --
Amortization of deferred financing costs.......... -- 56 -- -- --
Net loss.......................................... -- -- (12,917) -- --
---- ---- -------- ------- -----
Balance at December 31, 1999...................... $995 $(71) $(14,658) $(4,334) $(315)
==== ==== ======== ======= =====

TREASURY STOCK
------------------
SHARES AMOUNT TOTAL
------ ------ -----

Balance at August 15, 1996 (date of inception).... -- $ -- $ --
Issuance of common stock to founders.............. -- -- 98
Net loss.......................................... -- -- (52)
--------- ----- -------
Balance at December 31, 1996...................... -- -- 46
Issuance of Series A-1 convertible preferred
stock............................................ -- -- 1,500
Net loss.......................................... -- -- (1,151)
--------- ----- -------
Balance at December 31, 1997...................... -- -- 395
Purchase of founders common stock................. 1,776,500 (461) (461)
Sale of custom publishing division to related
party............................................ -- -- (26)
Net loss.......................................... -- -- (538)
--------- ----- -------
Balance at December 31, 1998...................... 1,776,500 (461) (630)
Issuance of Series A-2 convertible preferred stock
in exchange for convertible note................. -- -- 450
Sale of Girls On division......................... -- -- 55
Issuance of common stock.......................... -- -- 24
Proceeds on payment of note receivable............ -- -- 105
Issuance of warrants to placement agent to
purchase common stock............................ -- -- --
Deferred compensation on stock options............ -- -- 804
Amortization of deferred compensation............. -- -- 2,203
Issuance of warrants to purchase Series B-2
preferred stock in connection with credit
facility......................................... -- -- --
Amortization of deferred financing costs.......... -- -- 56
Net loss.......................................... -- -- (12,917)
--------- ----- -------
Balance at December 31, 1999...................... 1,776,500 $(461) $(9,850)
========= ===== =======

See notes to financial statements.

F-5
75

BOLT, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
----------------------------
1997 1998 1999
------- ----- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................... $(1,151) $(538) $(12,917)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization............................. 25 75 536
Amortization of deferred financing costs.................. -- -- 56
Deferred stock based compensation......................... -- -- 3,007
Gain on sale of Girls On.................................. -- -- (1,436)
Changes in operating assets and liabilities:
Increase in accounts receivable........................ (136) (188) (1,558)
(Increase) decrease in prepaid expenses and other
current assets........................................ (61) 61 (692)
Increase in other assets............................... (17) (23) (852)
Increase in accounts payable........................... 153 74 3,380
Increase in accrued expenses........................... 73 138 2,801
Increase (decrease) in deferred revenues............... (8) 53 (25)
------- ----- --------
Net cash used in operating activities.................. (1,122) (348) (7,700)
------- ----- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (229) (65) (2,983)
Proceeds from the sale of Girls On........................ -- -- 386
------- ----- --------
Net cash used in investing activities.................. (229) (65) (2,597)
------- ----- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of convertible preferred stock,
net.................................................... 1,500 -- 46,712
Proceeds from equipment lease financing................... -- -- 651
Proceeds from the payment of note receivable.............. -- -- 105
Proceeds from the issuance of common stock................ 25 -- 24
Proceeds from convertible note............................ -- 500 --
Payments of capital lease obligations..................... -- (20) (108)
Payment of convertible note payable....................... -- -- (50)
Payments made for treasury stock.......................... -- (57) (83)
------- ----- --------
Net cash provided by financing activities.............. 1,525 423 47,251
------- ----- --------
Increase in cash and cash equivalents....................... 174 10 36,954
Cash and cash equivalents, beginning of period.............. 10 184 194
------- ----- --------
Cash and cash equivalents, end of period.................... $ 184 $ 194 $ 37,148
======= ===== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes................................ $ 1 $ 1 $ 6
Cash paid for interest.................................... $ -- $ 13 $ 79
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW TRANSACTIONS:
Fixed assets acquired under capital leases................ $ -- $ 247 $ 651
Note issued to founders for treasury stock................ $ -- $ 404 $ --
Note received for net assets of custom publishing division
from related party..................................... $ -- $ 420 $ --
Transfer of Girls On liabilities, net..................... $ -- $ -- $ 55
Conversion of promissory note into Series A-2 preferred
stock.................................................. $ -- $ -- $ 450
Warrant issued for Series B-3 convertible preferred stock
in connection with credit facility..................... $ -- $ -- $ 127
Warrant issued for common stock to placement agent........ $ -- $ -- $ 868

See notes to financial statements.
F-6
76

BOLT, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1997,

1998 AND 1999

1. THE COMPANY

ORGANIZATION--Bolt, Inc., was incorporated in the State of Delaware on
August 15, 1996 under the name Concrete Media, Inc. ("Concrete"). Concrete
amended and restated its certificate of incorporation on January 10, 1997. As
part of a reorganization, the Company sold its custom publishing business
division, effective December 30, 1998, and sold its Girls On Web content site
("Girls On") effective January 29, 1999. Effective February 1999, Bolt Media,
Inc. was merged into Concrete and Concrete changed its name to Bolt Media, Inc.
(the "Company"). On November 17, 1999, Bolt Media, Inc. changed its name to
Bolt, Inc. ("Bolt").

Prior to December 30, 1998, the Company operated through three divisions
and/or subsidiaries:

Bolt, a leading provider of member generated, teen focused content on
the Internet through its portal site, Bolt. com;

Custom Publishing, which provided Web site development and related
services to third parties; and

Girls On, a leading provider of entertainment-related content, written
by and focused toward young women.

2. SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES

BASIS OF PRESENTATION--The financial statements include the accounts of
Bolt, Inc., and its wholly-owned subsidiary from the date of inception through
the period December 31, 1998. The subsidiary was merged with and into the
Company on February 16, 1999 (see note 1). All significant intercompany accounts
and transactions have been eliminated in consolidation through December 31,
1998.

USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amount of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS--The Company considers all highly liquid
investments purchased with original maturities of three months or less to be
cash equivalents.

PROPERTY AND EQUIPMENT AND RELATED DEPRECIATION AND AMORTIZATION--Property
and equipment are stated at cost, and in the case of equipment under capital
leases, the present value of the future minimum lease payments, less accumulated
depreciation and amortization. Depreciation and amortization is calculated using
the straight-line method over the estimated useful lives of the depreciable
assets, which range from three to seven years, or the lease term. Improvements
are capitalized, while repair and maintenance costs are charged to operations as
incurred.

INVESTMENTS--Investments in less than 20% of the share capital of other
companies are presented at cost. In the event that management identifies a
decline of an other than temporary nature in the estimated fair value of an
investment to an amount below cost, such investment will be written down to fair
market value.

IMPAIRMENT OF ASSETS--The Company's long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that the net
carrying amount may not be recoverable. When such events occur, the Company
measures impairment by comparing the carrying value of the long-lived asset to
the estimated undiscounted future cash flows expected to result from use of the
assets and their eventual disposition. If the sum of the expected undiscounted
future cash flows were less than the carrying amount of the assets, the Company
would recognize an impairment loss. The impairment loss, if determined to be

F-7
77
BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

necessary, would be measured as the amount by which the carrying amount of the
asset exceeds the fair value of the asset. The Company determined that, as of
December 31, 1997, 1998 and 1999, there had been no impairment in the carrying
value of its long-lived assets.

COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE--As of
January 1, 1999, costs of computer software developed or obtained for internal
use are capitalized while in the application development stage and are expensed
while in the preliminary stage and post-implementation stage. The Company
amortizes these capitalized costs over the life of the systems, which is
estimated to be three years. During 1999, the Company capitalized approximately
$1.4 million of internal development and software purchase costs relating to its
Web site incurred during the application development stage. Prior to January 1,
1999, the Company expensed all internal costs related to software development.

DEFERRED REVENUES--Deferred revenues represents amounts billed in excess of
revenues recognized. Included in accounts receivable are amounts due (under
contract) relating to deferred revenues.

REVENUE RECOGNITION--Income is derived from a variety of sources, including
advertising and sponsorship, custom publishing and syndication and E-commerce.
Revenues from advertising are derived from the sale of advertising space on the
Company's different online services, typically include the guarantee of a
minimum number of impressions (times that an advertisement is viewed by members
of the Company's online service) and are recognized ratably as impressions are
delivered over the period of the advertising contract. The Company's obligations
relating to the minimum impressions guaranteed result in the Company constantly
monitoring the number of impressions delivered and adjusting our revenue
recognition model, which takes into account the number of impressions needed to
deliver the guaranteed minimum. In the event the Company determines that the
minimum number of impressions will not be met within the specified period of
time, the Company will continue to run the advertisement on our Web site until
the minimum number of impressions guaranteed is achieved. The amount of revenue
recognized is adjusted ratably as the number of impressions are delivered over
the revised time estimated for delivery of the remaining impressions. None of
our agreements to date have required us to refund to advertisers amounts paid.

Revenues from custom publishing projects and production services from
customers that advertise on our site are recognized as earned, over the term of
each project. Substantially all projects were completed by December 31, 1997,
1998 and 1999. E-commerce revenues are recognized when the products are shipped.
We also generate e-commerce revenues by charging transaction fees to retailers
and e-commerce companies that wish to use our site to promote their products and
services as well as to purchase premiere positioning on our site. Generally
these companies pay us either a flat fee, a fee based on retail sales to our
members or a combination of the two. We recognize transaction fee revenues when
earned from our third party partners or, in cases where we receive a flat fee,
based on the term of the contract.

The Company has also recognized revenue from America Online, Inc. ("AOL")
from the management of AOL's branded teen message boards and teen chat rooms,
and for the development and maintenance of the Bolt branded Web site resident on
the AOL service called aol.bolt.com. Revenue is recognized based on the level of
these monthly services provided in relation to the total services estimated to
be provided over the 26-month term of the agreement. Non-cash barter revenue of
approximately $118,000 has been recognized for the year ended December 31, 1999.
Additionally, the Company will pay AOL a cash amount and will receive a minimum
number of impressions over the term of this agreement, which will be amortized
ratably as the impressions are delivered.

INCOME TAXES--The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes," pursuant to which deferred income tax assets and liabilities are
determined based on the difference between the financial statement and tax bases
of assets and liabilities, using enacted tax rates currently in effect. State
and local taxes are based on factors other than income.

NET LOSS PER COMMON SHARE--Basic loss per common share was computed by
dividing net loss by the weighted average number of shares of common stock
outstanding. Diluted loss per share has not been

F-8
78
BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

presented since the impact for options and warrants, and conversion of preferred
shares would have been anti-dilutive (see notes 11 & 13).

FAIR VALUE OF FINANCIAL INSTRUMENTS--The Company's financial instruments,
including cash and cash equivalents, accounts receivable, accounts payable, and
notes payable are carried at cost, which approximates their fair value because
of the short-term maturity of these instruments and the relatively stable
interest rate environment.

STOCK SPLIT--On November 17, 1999, the Company effected a four-for-one
stock split of each outstanding share of common stock. The four-for-one stock
split described above has been applied retrospectively for all periods
presented.

UNAUDITED PRO FORMA NET LOSS PER SHARE AND UNAUDITED PRO FORMA
STOCKHOLDERS' EQUITY--Unaudited Pro forma net loss per share has been computed
in the same manner as net loss per common share as described above and also
gives effect to the conversion of all convertible preferred stock that will
automatically convert upon the completion of the Company's initial public
offering using the if-converted method (see notes 10 and 11). If the offering
contemplated by this prospectus is consummated, all of the convertible preferred
stock outstanding as of December 31, 1999 will automatically be converted into
an aggregate of 16,388,567 shares of common stock, including 1,442,803 shares to
be issued pursuant to anti-dilution rights upon the conversion of the Series C
Preferred Stock (see Note 10), based on the shares of convertible preferred
stock outstanding at December 31, 1999. Unaudited pro forma stockholders equity
at December 31, 1999, as adjusted for the conversion of all convertible
preferred stock is disclosed on the Balance Sheet. Pro forma basic net loss per
share is as follows:

YEAR ENDED
DECEMBER 31, 1999
-----------------

Net loss.................................................... $12,917,000
===========
Shares used in computing basic net loss per share........... 3,765,080
Adjusted to reflect the effect of the assumed conversion of
all convertible preferred stock from the date of
issuance.................................................. 9,852,928
-----------
Weighted average shares used in computing pro forma basic
net loss per share........................................ 13,618,008
===========
Pro forma basic net loss per share.......................... $ 0.95
===========

RECENT ACCOUNTING PRONOUNCEMENTS-- Effective January 1, 1998, the Company
adopted SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information." SFAS No. 131 establishes standards for the way business
enterprises report information about operating segments, as well as
enterprise-wide disclosures about products and services, geographic areas and
major customers. The Company operates in one segment in the United States and
recognized advertising and sponsorship revenues of approximately $32,000,
$404,000 and $3,502,000 for the years ended December 31, 1997, 1998 and 1999,
respectively; e-commerce revenues of approximately $0, $0, and $860,000 for the
years ended December 31, 1997, 1998 and 1999, respectively, and revenues related
to the Girls On and custom publishing divisions of approximately $446,000,
$2,281,000 and $38,000 for the years ended December 31, 1997, 1998 and 1999,
respectively.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. Generally, it
requires than an entity recognize all derivatives as either an asset or
liability and measure those instruments at fair value, as well as identify the
conditions for which a derivative may be specifically designed as a hedge. SFAS
No. 133 is effective for fiscal years beginning after June 15, 2000. The Company
does not currently engage or plan to engage in any derivative or hedging
activities.

F-9
79
BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

This statement requires companies to capitalize qualifying computer software
costs which are incurred during the application development stage and amortize
them over the software's estimated useful life. SOP 98-1 is effective for fiscal
years beginning after December 15, 1998. The Company adopted the requirements of
SOP 98-1 as of January 1, 1999.

3. SALE OF CERTAIN PORTIONS OF THE BUSINESS

CUSTOM PUBLISHING--On December 30, 1998, the Company sold its custom
publishing division, primarily comprised of the name "Concrete Media," the
division's customer list, certain computer equipment (total assets of
approximately $116,000) and all related liabilities of the division (totalling
approximately $90,000) to a related party, Concrete Media Construction, LLC (the
"LLC"). The selling price was $420,000, payable in the form of two promissory
notes, one for $105,000 and one for $315,000. At December 31, 1998, the notes
receivable were reflected as a reduction of stockholders' equity. The first note
was paid on January 29, 1999 and the other note is due on December 30, 2001. The
amount in excess of the carrying value of net assets transferred to the LLC of
approximately $394,000 was recorded as additional paid-in capital.

The Company continues to provide customers with content production services
related to advertising or product presentation on the Company's Web site.

GIRLS ON--On January 29, 1999, the Company sold all assets (approximately
$52,000) of the business of Girls On, primarily the name "Girls On," related
trademarks and the software code necessary to operate the site to a subsidiary
of the LLC, Girls On, Inc. in exchange for Girls On, Inc.'s assumption of all
current and future liabilities of Girls On (totalling approximately $107,000).

The Girls On sale agreement included a provision entitling the Company to
additional contingent consideration based on a formula set forth in the
agreement. On August 5, 1999, the LLC sold Girls On to Oxygen Media, LLC. In
connection with this sale, pursuant to the contingent consideration provision of
the agreement, the Company received $386,000 in cash as well as equity
securities in Oxygen Media with a fair value of $1,050,000. The equity
securities in Oxygen Media are accounted for under the cost method since they
are not traded on a public market and have no readily determinable fair value.

The gain of $1,436,000 was recognized in the third quarter of 1999.

4. CONCENTRATION OF CREDIT RISK

Financial instruments, which subject the Company to concentrations of
credit risk, consist primarily of cash and cash equivalents, and trade accounts
receivable. The Company maintains cash and cash equivalents with various
domestic financial institutions. The Company performs periodic evaluations of
the relative credit standing of these institutions. From time to time, the
Company's cash balances with any one financial institution may exceed Federal
Deposit Insurance corporation insurance limits.

The Company's customers are concentrated in the United States. The Company
performs ongoing credit evaluations, generally does not require collateral and
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of customers, historical trends and other information; to date
such losses have been within management's expectations.

F-10
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5. PROPERTY AND EQUIPMENT

At December 31, 1998 and 1999, property and equipment consisted of the
following (in thousands):

DECEMBER 31,
--------------
DESCRIPTION 1998 1999
- ------------------------------------------------------------ ---- ------

Computer equipment, including assets under capital leases... $365 $3,058
Furniture and fixtures...................................... 193 390
---- ------
558 3,448
Less accumulated depreciation and amortization.............. 104 627
---- ------
Property and equipment, net................................. $454 $2,821
==== ======

6. INCOME TAXES

No provision for income taxes has been made because the Company has
sustained cumulative losses since the commencement of operations. At December
31, 1999, the Company had net operating loss carryforwards ("NOLs") of
approximately $14,450,000, which will be available to reduce future taxable
income. The NOLs are expected to expire in the following years (in thousands):

YEAR ENDING DECEMBER 31,
- ------------------------------------------------------------

2012........................................................ $ 1,166
2013........................................................ 554
2014........................................................ 12,730
-------
$14,450
=======

In accordance with SFAS No. 109, the Company has computed the components of
deferred income taxes as follows (in thousands):

DECEMBER 31, DECEMBER 31,
1998 1999
------------ ------------

Deferred tax assets................................... $ 771 $ 6,792
Less valuation allowance.............................. (771) (6,792)
----- -------
Net deferred taxes.................................... $ -- $ --
===== =======

The Company's NOLs primarily generated the deferred tax assets. At December 31,
1998 and 1999, a valuation allowance was provided as the realization of the
deferred tax benefits is not likely.

The effective tax rate varies from the U.S. Federal Statutory tax rate for
the years ended December 31 principally due to the following:

1997 1998 1999
---- ---- ----

U.S. Federal Statutory tax rate............................. 35% 35% 35%
State and local taxes....................................... 12% 12% 12%
Valuation allowance......................................... (47)% (47)% (47)%
--- --- ---
Effective tax rate.......................................... --% --% --%
=== === ===

7. CONVERTIBLE PROMISSORY NOTE

On January 22, 1998, the Company entered into a convertible promissory note
with the Series A preferred stockholder whereby the Company received a $500,000
loan, due July 22, 1998, or thereafter on demand. The note bears interest at 10%
per annum. On February 17, 1999, a portion of the note was paid,

F-11
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

along with accrued interest. The balance of this note was then converted into
125,000 shares of Series A-2 preferred stock (see note 11).

8. SHORT TERM DEBT

In August 1999, the Company entered into a short-term revolving line of
credit of up to $500,000 with a financing company, maturing on September 1,
2000. Borrowings under this line are made available to the Company against
certain eligible receivables as defined in the agreement and bear interest at
prime (8.5% as of December 31, 1999) plus one percent. As of December 31, 1999,
there were no outstanding borrowings under the line. The loan is collateralized
by the Company's cash and cash equivalents and accounts receivable.

9. COMMITMENTS

OFFICE LEASES--In August 1998, the Company entered into a sublease
agreement to rent office space through February 27, 2007.

Rent expense was $52,523, $111,859 and $231,818 for the years ended
December 31, 1997, 1998 and 1999, respectively.

Future minimum payments under the operating lease are as follows (in
thousands):

Year ending December 31, 2000............................... 297
Year ending December 31, 2001............................... 265
Year ending December 31, 2002............................... 265
Year ending December 31, 2003............................... 265
Year ending December 31, 2004............................... 265
Thereafter.................................................. 574
------
Total minimum lease payments...................... $1,931
======

EQUIPMENT LEASES--In August 1999, the Company entered into an equipment
lease financing agreement with a financing company. The agreement provides for
borrowings not to exceed $1,000,000 which are secured by the Company's equipment
and fixtures, and expires at the end of each lease term. The Company has an
option to increase this lease line by an additional $500,000 by providing
written notice. As of December 31, 1999, $598,529 was outstanding under the
line. In addition, the Company issued the financing company a warrant to
purchase preferred stock (see note 11).

The Company is a lessee under several capital lease agreements with third
parties for certain equipment. Future minimum lease payments under noncancelable
capital leases, together with the present value of the net minimum payments as
of December 31, 1999, are as follows (in thousands):

Year ending December 31, 2000............................... $311
Year ending December 31, 2001............................... 282
Year ending December 31, 2002............................... 205
Year ending December 31, 2003............................... 23
Year ending December 31, 2004............................... 23
Thereafter.................................................. 49
----
Total minimum lease payments...................... $893
----
Less: amounts representing interest......................... 123
----
Present value of minimum capital lease payments............. 770
Less: current portion....................................... 256
----
Long-term capitalized lease obligations..................... $514
====

The assets and liabilities under capital leases are recorded at the present
value of the minimum lease payments using effective interest rates ranging from
8 percent to 21 percent per annum.

F-12
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

10. REDEEMABLE CONVERTIBLE PREFERRED STOCK

In February 1999, the Company sold 1,317,205 shares of Series B-1 and B-2
Convertible Preferred Stock (the "Series B Preferred Stock") to a group of
investors. The net proceeds to the Company were approximately $8,019,000.
Currently each share of Series B Preferred Stock is convertible, at any time, at
the option of the holder, into five shares of Common Stock. Each share of Series
B Preferred Stock also converts automatically into five shares of Common Stock
upon the closing of a firm commitment underwritten public offering with (1)
gross proceeds to Bolt of at least $20,000,000 and (2) a public offering price
per share that reflects a pre-offering value of Bolt, on a fully-diluted basis,
of at least $31,250,000.

On November 17, 1999, November 23, 1999 and December 6, 1999, the Company
sold an aggregate of 3,787,801 shares of Series C Convertible Preferred Stock
("Series C Preferred Stock") to a group of investors for $10.25 per share. The
Company received gross proceeds from this sale of approximately $38.8 million.
Currently, each share of Series C Preferred Stock is convertible, at any time,
at the option of the holder, into 1.25 shares of Common Stock. Each share of
Series C Preferred Stock also converts automatically into 1.25 shares of Common
Stock upon the closing of a firm commitment underwritten public offering with
(1) net proceeds to the Company of at least $25,000,000 and (2) a public
offering price of at least $14.35 per share. In addition, if the initial public
offering price is below $14.35 per share and the Series C Preferred Stockholders
waive or amend the preceding provision the Series C preferred stockholders are
entitled to anti-dilution rights which increase the number of shares of common
stock into which each share of Series C preferred stock is convertible. If the
initial public offering price is below $14.35 per share, each share of Series C
preferred stock is convertible into a number of shares of common stock equal to
1.25 multiplied by a fraction the numerator of which is $14.35 and the
denominator of which is the initial public offering price.

The Company will be required to redeem all outstanding shares of Series B
and Series C Preferred Stock on November 17, 2004. The Series B-1 Preferred
Stock is redeemable for $6.20 per share plus all declared and unpaid dividends,
if any. The Series B-2 Preferred Stock is redeemable for $7.44 per share plus
all declared and unpaid dividends, if any. The Series C Preferred Stock is
redeemable at $10.25 per share plus all declared and unpaid dividends, if any.
The carrying values of the Series B and Series C Preferred Stock are their
redemption values, net of offering costs, as no dividends have been declared or
paid on these shares.

The Series B and Series C Preferred stockholders have senior preference and
priority as to the dividends of the Company. If declared, dividends shall accrue
at 8% of the $6.20 stated value of the Series B-1 Preferred Stock, at 8% of the
$7.44 stated value of the Series B-2 Preferred Stock and at 8% of the $10.25
stated value of the Series C Preferred Stock. Series B and Series C Preferred
Stock dividends are not cumulative.

Series A and Series B and Series C Preferred stockholders are entitled to
voting rights equal to the number of shares of Common Stock into which the
preferred stock is convertible. These holders have additional voting rights
regarding matters that affect their series of preferred stock and certain other
matters.

11. STOCKHOLDERS' EQUITY (DEFICIENCY)

PREFERRED STOCK--In January 1997, the Company sold 600,000 shares of Series
A-1 Convertible Preferred Stock to an investor in a private placement. The
Company received net proceeds of $1,500,000. Currently, each share of Series A-1
Preferred Stock is convertible, at the option of the holder, into five shares of
Common Stock.

In February 1999, the holder of the convertible promissory note (see note
7) exercised its option to convert the convertible promissory note after the
Company made payments of $50,000 of principal and $52,479 of interest. The
remaining $450,000 under this note was converted into 125,000 shares of Series
A-2 Preferred Stock. Each share of Series A-2 Preferred Stock is convertible
into five shares of Common Stock.

The Series A-1 and Series A-2 (the "Series A Preferred Stock") Preferred
Stockholders have senior preference and priority to the Common Stock to the
dividends of the Company. Dividends payable on the Series A Preferred Stock, if
declared, will be payable at a rate per annum determined by the Company's Board

F-13
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

of Directors. Series A Preferred Stock Dividends are not cumulative. Each share
of Series A Preferred Stock converts automatically into five shares of Common
Stock upon the closing of a firm commitment underwritten public offering with
(1) a public offering price of at least $8.00 per share and (2) net proceeds to
Bolt that exceed $10,000,000.

After dividends are paid on the Company's Series B Preferred Stock and
Series A Preferred Stock, holders of such shares shall participate with the
holders of the Company's Common Stock in the issuance of any further dividends
ratably in proportion to the number of shares of Common Stock that would be held
by each such holder if all outstanding shares of the Company's Series B
Preferred Stock and Series A Preferred Stock were converted into common stock.

TREASURY STOCK--In July 1998, a founder left the Company. Under the terms
of a Shareholders' Agreement, on December 22, 1998, the Company repurchased
888,250 shares for approximately $.01 per share. The balance of the founder's
shares, 888,250 shares, were repurchased at a price of $.50 per share.

The total purchase price of $453,750 was paid as follows: $50,000 upon
closing, and the balance in the form of a promissory note. The note requires
twenty-two monthly payments of $2,750 each, and a payment of $50,000 due
December 22, 1999, and the balance of $293,250 with interest, is due November
2000. In addition, the Company incurred $7,203 of expenses related to this
transaction.

WARRANTS--The Company has issued a warrant to purchase 50,000 shares of
Common Stock at $.02 per share to a placement agent in connection with the
Series B Preferred Stock financing. This warrant may be exercised in the event
of any of the following: (a) a sale of assets of the Company for which
stockholder approval is required, (b) a sale of shares of Common Stock of the
Company pursuant to an effective registration statement, (c) the purchase of
more than 66 2/3% of the Company's Common Stock by any person or entity and (d)
a merger or consolidation of the Company which existing shareholders do not own
a majority of the shares of the surviving entity. The Company has recorded this
warrant at $868,000 using the Black Scholes option pricing method and has
reduced additional paid in capital for a like amount.

In connection with an equipment lease line of credit, the Company has
granted a warrant to purchase Series B-3 Preferred Stock. This warrant expires
on August 31, 2006. This warrant is exercisable for up to 1,975 shares of Series
B-3 Preferred Stock at an exercise price of $30.37 per share and has a
redemption value of $30.37 per share plus all declared and unpaid dividends, if
any, and is valued at approximately $127,000 using the Black Scholes option
pricing model. Each share of Series B-3 Preferred Stock is convertible into five
shares of the Company's Common Stock. Upon the completion of an initial public
offering of the Company's Common Stock, this warrant will automatically convert
into a warrant to purchase 9,875 shares of Common Stock at an exercise price of
$6.07 per share. An offset in the stockholders' equity section has been recorded
as deferred financing costs and will be amortized over the three-year life of
the financing agreement.

12. RETIREMENT PLAN

The Company has a 401(k) Retirement/Savings Plan (the "401(k) Plan") for
all eligible employees. Employees are eligible to participate on the date of
hire. The Company is not required to, but may make discretionary contributions
to the 401(k) Plan. The Company did not make any voluntary contributions to the
401(k) Plan for the years ended December 31, 1997, 1998 and 1999.

13. STOCK OPTION PLANS

The Company has established the 1997 Employee Stock Option Plan (the "1997
Plan") and the 1999 Employee, Director and Consultant Stock Option Plan (the
"1999 Plan") to reward employees, consultants and directors for service to the
Company and to provide incentives for future service and enhancement of
shareholder value. As of December 31, 1999, the 1997 Plan and the 1999 Plan
provided for awards of up to 530,680 and 4,767,500 shares of common stock of the
Company, respectively. Options granted under these plans typically vest over a
four-year period with 25% vesting in the first year of grant and the remainder
vesting

F-14
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

equally each month over a thirty-six month period. A total of 4,060,000 options
had been granted under these plans as of December 31, 1999.

The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for its employee stock options.

Transactions involving the incentive stock options granted to employees are
summarized as follows:

WEIGHTED
AVERAGE
NUMBER EXERCISE
OF OPTIONS PRICE
---------- --------

Granted..................................................... 712,500 $.50
Exercised................................................... -- $.50
Canceled.................................................... -- $.50
----------
Outstanding, December 31, 1997.............................. 712,500 $.50
Granted..................................................... 200,000 $.50
Exercised................................................... -- $.50
Canceled.................................................... (127,500) $.50
----------
Outstanding, December 31, 1998.............................. 785,000 $.50
Granted..................................................... 3,147,500 $.72
Exercised................................................... (48,180) $.46
Canceled.................................................... (614,820) $.46
----------
Outstanding, December 31, 1999.............................. 3,269,500 $.72
==========

Weighted average fair value of options granted during the fiscal year:

1997........................................................ $ .50
1998........................................................ $ .50
1999........................................................ $3.36

The following table summarizes information about stock options outstanding
as of December 31, 1999.

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------------------------ ---------------------------------------
NUMBER WEIGHTED AVERAGE NUMBER
OUTSTANDING AT REMAINING WEIGHTED AVERAGE EXERCISABLE AT WEIGHTED AVERAGE
EXERCISE PRICE DECEMBER 31, 1999 LIFE (YEARS) EXERCISE PRICE DECEMBER 31, 1999 EXERCISE PRICE
- -------------- ----------------- ---------------- ---------------- -------------------- ----------------

$ 0.46 2,480,750.... 9.3 $0.46 888,250 $0.46
$ 0.50 482,500...... 7.0 $0.50 392,291 $0.50
$ 2.66 273,750...... 9.8 $2.66 -- $2.66
$ 7.38 32,500....... 9.9 $7.38 -- $7.38
--------- ----- --------- -----
3,269,500.... $0.72 1,280,541 $0.47

There were 46,303, 74,219 and 1,280,541 options exercisable as of December
31, 1997, December 31, 1998 and December 31, 1999, respectively.

These plans also provide for stock appreciation rights ("SAR's"). As of
December 31, 1999, no SAR's had been granted.

SFAS No. 123, Accounting for Stock-Based Compensation, provides for a fair
value based method of accounting for employee options and options granted to
non-employees and measures compensation expense using an option valuation model
that takes into account, as of the grant date, the exercise price and expected

F-15
85
BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

life of the option, the current price of the underlying stock and its expected
volatility, expected dividends on the stock, and the risk-free interest rate for
the expected term of the options.

During the year ended December 31, 1999, the Company granted 444,125 fully
vested stock options to non-employees. Additionally in 1999, the Company granted
75,000 stock options to non-employees that will vest over a four-year period.
There were no option grants to non-employees for the years ended December 31,
1997 or 1998. The Company has recorded total compensation expense of $458,592
for the year ended December 31, 1999 related to the issuance of options to
non-employees. The fair value of each stock option was estimated using the
Black-Scholes option pricing model with the following assumptions: a risk free
interest rate of 6.0%, a weighted-average expected life of 3.25 years, no
dividend yield and a 50% volatility.

In connection with the issuance of certain options at prices below the fair
market value, the Company had recorded deferred compensation expense of $4.3
million as of December 31, 1999, representing the difference between the
exercise price and the deemed fair market value of the Company's common stock at
such date. Such amount is included as a reduction of stockholders' equity and is
being amortized by charges to operations over the vesting period. Amortization
of deferred compensation amounted to approximately $2.2 million for the year
ended December 31, 1999. On February 19, 1999, the Company granted 444,125 stock
options to one of the Company's founders at an exercise price of $.46. Such
options vested immediately. The Company has recorded a charge of $344,641,
representing the difference between the exercise price and the deemed fair
market value of the Company's common stock at such date.

Pro forma disclosure as if the Company adopted the cost recognition
requirement under SFAS 123 is presented below (in thousands).

YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------ ------------ ------------

Net loss applicable to common shares--as reported.... $1,151 $538 $12,917
Net loss applicable to common shares--pro forma...... $1,163 $552 $15,522
Loss per common share--as reported................... $.21 $.10 $3.43
Loss per common share--pro forma..................... $.21 $.10 $4.12

The Company used the Black-Scholes option pricing model to estimate fair
value utilizing the following assumptions for the respective years (all numbers
shown are weighted averages):

YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1998 DECEMBER 31, 1999
----------------- ----------------- ------------------

Risk-free interest rate................. 4.62% 4.62% 6.00-6.50%
Expected life of options................ 3.25 years 3.25 years 3.25-4.25 years
Expected annual volatility.............. .001% .001% 50%
Expected dividend yield................. none none none

14. MAJOR CUSTOMERS

One customer accounted for 11% of our total revenues for the year ended
December 31, 1999. Revenues from one customer represented 52% of total revenues
in 1998. Revenues from two customers represented 15% and 10%, respectively, of
total revenues in 1997.

15. RELATED PARTY TRANSACTIONS

On December 30, 1998, the Company entered into an agreement whereby the
Company and the LLC have been providing and will continue to provide certain
services to each other as defined in the agreement. These amounts are determined
based on the actual costs incurred related to such services provided. In

F-16
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BOLT, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

addition, in 1999 the Company paid Concrete Media Construction about $403,000 to
develop Web sites for two of our advertising customers.

16. SUBSEQUENT EVENTS

SERIES D FINANCING--On February 29, 2000, the Company sold 418,060 shares
of Series D Convertible Preferred Stock ("Series D Preferred Stock") to an
investor for $17.94 per share. The Company received gross proceeds from this
sale of approximately $7.5 million. The Series D Preferred stockholders have
senior preference and priority, along with the Series B and Series C Preferred
stockholders, as to dividends declared by the Company. If declared, dividends
shall accrue at 8% of the $17.94 stated value of the Series D Preferred Stock.
Currently, each share of Series D Preferred Stock is convertible at any time, at
the option of the holder, into 1.25 shares of Common Stock. Each share of Series
D Preferred Stock also converts automatically into 1.25 shares of Common Stock
upon the closing of a firm commitment underwritten public offering with (1) net
proceeds to the Company of at least $25,000,000 and (2) a public offering price
of at least $14.35 per share.

The Company will be required to redeem all outstanding shares of Series D
Preferred Stock on February 29, 2005. The Series D Preferred Stock is redeemable
for $17.94 per share plus all declared and unpaid dividends, if any. The
carrying value of the Series D Preferred Stock is its' redemption value, net of
offering costs, as no dividends have been declared or paid.

In connection with this financing, the Company increased its total
authorized capital stock to 57,500,000 shares, divided as follows: (i) fifty
million (50,000,000) shares of common stock, par value $0.001 per share and (ii)
seven million five hundred thousand (7,500,000) shares of preferred stock, par
value $0.001 per share.

EMPLOYMENT AGREEMENT--The Company entered into an employment agreement with
an individual to serve as our Executive Vice President starting on January 17,
2000. The term of this agreement is two years. He will be paid a base salary of
$180,000 during the first year and $195,000 during the second year of this
agreement. He is also entitled to (1) a yearly bonus of $50,000, (2) a
performance bonus of up to $100,000 based on Bolt's attainment of mutually
agreed upon revenue performance targets and (3) an additional bonus based upon
the amount by which our revenues exceed these targets. Pursuant to this
agreement, he received a non-qualified option to purchase 300,865 shares of our
common stock at an exercise price of $2.66 per share. This options vests as to
25% of the shares on the first anniversary of the date of grant and the
remaining portion becomes exercisable in 36 equal monthly installments
thereafter.

LEASE AGREEMENT--On February 18, 2000, the Company entered into a lease for
approximately 92,000 square feet of office space in New York, New York. The
Company expects to occupy this space within six months. The lease will expire
ten years from the occupancy date. In connection with the lease, the Company has
given an initial $4.0 million security deposit that will be subject to an annual
reduction of approximately $400,000 over the term of the lease.

STOCK SPLIT-- On February 29, 2000, the Company effected a 1.25-for-1 stock
split of each share of its Common Stock. The 1.25-for-1 stock split has been
applied retrospectively for all periods presented.

F-17
87

[DESCRIPTION OF GRAPHICS]

The graphic at the top of the page contains the following phrases: "Bolt
Profiles give members the chance to find out more about each other (Info about
Me, My Homepage, My Board Posts, and Diary), contact each other [Notes], and
respond to each other's personal polls [Tagbook]"; and "Stats: 40k notes sent
per day, 45k board posts per day, 75k poll responses per day and 600K email
accounts."

The remainder of the page contains a graphic which is a sample profile
application, "SupaFlyGuy", which includes "stats" regarding the age, sex,
birthday, zodiac sign, country of, and membership information for the member.
Click-throughs from various links from the profile are displayed around the
profile, such as samples of various applications for "info about me", "diary",
"tagbook", "my board posts", "send notes", and "my homepage". Directly below the
profile application page is a quote from a member, which states: "Bolt cuts out
the fluff. It's about the people who use it, what we want to see, our lives."
88

BOLT.COM LOGO
89

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth an itemization of all estimated expenses,
all of which we will pay, in connection with the issuance and distribution of
the securities being registered:

SEC Registration Fee........................................ $ 13,480
Nasdaq National Market Listing Fee.......................... 90,000
NASD Filing Fee............................................. 5,606
Printing and Engraving Fees................................. 150,000
Legal Fees and Expenses..................................... 375,000
Accounting Fees and Expenses................................ 325,000
Blue Sky Fees and Expenses.................................. 10,000
Transfer Agent and Registrar Fees........................... 10,000
Miscellaneous............................................... 20,914
----------
Total............................................. $1,000,000
==========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our certificate of incorporation provides that we shall indemnify, to the
fullest extent authorized by the Delaware General Corporation Law, each person
who is involved in any litigation or other proceeding because such person is or
was a director or officer of Bolt, Inc. or is or was serving as an officer or
director of another entity at our request, against all expense, loss or
liability reasonably incurred or suffered in connection therewith. Our
certificate of incorporation provides that the right to indemnification includes
the right to be paid expenses incurred in defending any proceeding in advance of
its final disposition, provided, however, that such advance payment will only be
made upon delivery to us of an undertaking, by or on behalf of the director or
officer, to repay all amounts so advanced if it is ultimately determined that
such director is not entitled to indemnification. If we do not pay a proper
claim for indemnification in full within 60 days after we receive a written
claim for such indemnification, our bylaws authorize the claimant to bring an
action against us and prescribes what constitutes a defense to such action.

Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any director or officer of the corporation against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any action, suit or
proceeding brought by reason of the fact that such person is or was a director
or officer of the corporation, if such person acted in good faith and in a
manner that he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal action or
proceeding, if he or she had no reason to believe his or her conduct was
unlawful. In a derivative action, (i.e., one brought by or on behalf of the
corporation), indemnification may be provided only for expenses actually and
reasonably incurred by any director or officer in connection with the defense or
settlement of such an action or suit if such person acted in good faith and in a
manner that he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, except that no indemnification shall be provided
if such person shall have been adjudged to be liable to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine that the defendant is fairly and reasonably entitled to
indemnity for such expenses despite such adjudication of liability.

Pursuant to Section 102(b)(7) of the Delaware General Corporation Law,
Article Tenth of our certificate of incorporation eliminates the liability of a
director to us or our stockholders for monetary damages for such a breach of
fiduciary duty as a director, except for liabilities arising:

- from any breach of the director's duty of loyalty to us or our
stockholders;

- from acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

- under Section 174 of the Delaware General Corporation Law; and

- from any transaction from which the director derived an improper
personal benefit.
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We carry insurance policies insuring our directors and officers against
certain liabilities that they may incur in their capacity as directors and
officers.

Additionally, reference is made to the Underwriting Agreement filed as
Exhibit 1.1 hereto, which provides for indemnification by the underwriters of
Bolt, our directors and officers who sign the Registration Statement and persons
who control Bolt, under certain circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this Registration Statement, we
have sold the following securities that were not registered under the Securities
Act. The following information gives effect to a 4-for-1 split of our common
stock effected on November 17, 1999 and a 1.25-for-1 split of our common stock
effected on February 29, 2000.

(a) ISSUANCES OF CAPITAL STOCK AND WARRANTS

The sale and issuance of the securities described in paragraphs (1) through
(10) below were deemed to be exempt from registration under the Securities Act
by virtue of Section 4(2) or Regulation D promulgated thereunder.

(1) On September 1, 1996, we issued a total of 5,500,000 shares of
common stock to two of our founders for $.00002 per share. We repurchased
1,776,500 of these shares in December 1998.

(2) On January 10, 1997, we sold and issued a total of 600,000 shares
of Series A-1 Convertible Preferred Stock for $2.50 per share to one
investor in a private placement. Each share of our Series A-1 preferred
stock is convertible into five shares of our common stock.

(3) On February 22, 1999, we issued 125,000 shares of Series A-2
Convertible Preferred Stock to one investor in exchange for $450,000 of
principal of a note payable by Bolt. Each share of our Series A-2 preferred
stock is convertible into five shares of our common stock.

(4) On February 23, 1999, we sold and issued a total of 1,048,387
shares of Series B-1 Convertible Preferred Stock for $6.20 per share to 18
investors in a private placement. Each share of our Series B-1 preferred
stock is convertible into five shares of our common stock.

(5) On March 1, 1999, we sold and issued a total of 268,818 shares of
Series B-2 Convertible Preferred Stock for $7.44 per share to two investors
in a private placement. Each share of our Series B-2 preferred stock is
convertible into five shares of our common stock.

(6) On November 17, 1999, November 23, 1999 and December 6, 1999, we
sold and issued a total of 3,787,801 shares of Series C Convertible
Preferred Stock for $10.25 per share to 32 investors in a private
placement. Each share of our Series C preferred stock is convertible into
1.25 shares of our common stock.

(7) On February 29, 2000, we sold and issued 418,060 shares of Series
D Convertible Preferred Stock for $17.94 per share to one investor in a
private placement. Each share of our Series D Preferred Stock is
Convertible into 1.25 shares of common stock.

(8) On April 22, 1999, we issued a warrant to purchase 50,000 shares
of our common stock at an exercise price of $.02 per share to one investor.

(9) On August 23, 1999, we issued a warrant to purchase 1,975 shares
of our Series B-3 Convertible Preferred Stock at an exercise price of
$30.37 per share to one investor. Each share of our Series B-3 preferred
stock is convertible into five shares of our common stock.

(10) On January 28, 2000, we issued a warrant to purchase 20,834
shares of our common stock at an exercise price of $8.20 per share to one
investor.

(11) On February 16, 2000, we issued a warrant to purchase 70,000
shares of our common stock at an exercise price of $14.35 per share to one
investor.

(b) CERTAIN GRANTS AND EXERCISES OF STOCK OPTIONS

The sale and issuance of the securities described below were deemed to be
exempt from registration under the Securities Act in reliance on Rule 701
promulgated under Section 3(b) of the Securities Act, as transactions by an
issuer not involving a public offering or transactions pursuant to compensatory
benefit plans and contracts relating to compensation as provided under Rule 701.
II-2
91

Pursuant to our 1999 Employee, Director and Consultant Stock Option Plan
and our 1997 Employee Stock Option Plan, as of February 28, 2000, we have issued
options to purchase an aggregate of 4,809,615 shares of common stock. Of these
options:

- options to purchase 754,195 shares of common stock have been canceled or
lapsed without being exercised;

- options to purchase 547,343 shares of common stock have been exercised;
and

- options to purchase a total of 3,508,077 shares of common stock are
currently outstanding, at a weighted average exercise price of $1.75 per
share.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------

*1.1 Form of Underwriting Agreement.
@3.1 Restated Certificate of Incorporation of the Registrant.
3.2 Restated Certificate of Incorporation of the Registrant to
be filed upon completion of this offering.
+3.3 Amended and Restated Bylaws of the Registrant.
3.4 Restated Bylaws of the Registrant to be effective upon
completion of this offering.
4.1 Form of Common Stock Certificate.
*5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. with respect to the legality of securities being
registered.
+10.1 The Registrant's Amended and Restated 1999 Employee,
Director and Consultant Stock Option Plan.
+10.2 The Registrant's 1997 Employee Stock Option Plan.
+10.3 Second Amended and Restated Registration Rights Agreement,
dated November 17, 1999 by and between the Registrant and
Certain Stockholders.
10.3.1 First Amendment to the Second Amended and Restated
Registration Rights Agreement, dated February 29, 2000, by
and between the Registrant and Certain Stockholders.
+10.4 Agreement of Sublease, dated August 15, 1998, by and between
Avalanche Solutions, Inc. and the Registrant.
+10.5 Office Service Agreement, dated October 29, 1999, by and
between Vantas West Wacker, Inc., dba VANTAS, and the
Registrant.
+10.6 Office Service Agreement, dated June 30, 1999, by and
between Vantas and the Registrant.
**+10.7 Anchor Tenant Agreement, dated November 16, 1999, by and
between America Online, Inc. and the Registrant.
**+10.8 Special Delivery/Special Offer Agreement, dated August 15,
1999, by and between Lycos, Inc. and the Registrant.
**+10.9 Agreement, dated November 17, 1999, by and between Ford
Motor Co. and the Registrant.
**+10.10 Anchor Provider Agreement, dated August 27, 1999, by and
between Microsoft Corporation and the Registrant.
**+10.11 Advertising Insertion Order, dated September 1, 1999, by and
between Yahoo! Inc. and the Registrant.
+10.12 Asset Purchase and Assumption of Liabilities Agreement,
dated December 30, 1998, by and between the Registrant and
Concrete Media Construction, LLC.
+10.13 Asset Purchase and Assumption of Liabilities Agreement,
dated January 29, 1999, by and between the Registrant and
Girls On, Inc.

II-3
92

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ----------------------

10.14 Employment Agreement, dated December 29, 1999, by and
between the Registrant and Richard Glosser.
**10.15 Mobile Channel Agreement, dated January 28, 2000, by and
between the Registrant and AT&T Wireless Services, Inc.
10.16 Lease, dated February 18, 2000, by and between 195 Property
Company and the Registrant.
23.1 Consent of Deloitte & Touche LLP
*23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C. (see Exhibit 5.1)
23.3 Consent of Nielsen I/Pro
+24.1 Powers of Attorney (See page II-5)
27.1 Financial Data Schedule

- ------
* To be filed by amendment.
+ Previously filed.

@ Replaces previously filed exhibit.

** Confidential treatment has been requested for a portion of this exhibit.

(b) FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules are omitted because the information is
included in our financial statements or notes to those financial statements.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
93

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has duly caused this Amendment No. 2 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in New York, New York, on March 2, 2000.

BOLT, INC.

By: /s/ DANIEL A. PELSON

------------------------------------

Daniel A. Pelson

President & Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities held on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ DANIEL A. PELSON President, Chief Executive March 2, 2000
- --------------------------------------------------- Officer and Director
Daniel A. Pelson (principal executive officer)

/s/ ALBERT G. PASTINO Chief Financial Officer March 2, 2000
- --------------------------------------------------- (principal financial and
Albert G. Pastino accounting officer)

ROBERT DOVE* Director March 2, 2000
- ---------------------------------------------------
Robert Dove

WILLIAM PEABODY* Director March 2, 2000
- ---------------------------------------------------
William Peabody

SAMANTHA MCCUEN* Director March 2, 2000
- ---------------------------------------------------
Samantha McCuen

ALAN COLNER* Director March 2, 2000
- ---------------------------------------------------
Alan Colner

* By executing his name hereto, Daniel A. Pelson is signing this document on
behalf of the persons indicated above pursuant to the powers of attorney duly
executed by such persons and filed with the Securities and Exchange Commission.

By: /s/ DANIEL A. PELSON
----------------------------------------------
Daniel A. Pelson
Attorney-in-Fact

II-5
94

EXHIBIT INDEX

EXHIBIT
NUMBER
- -------- DESCRIPTION OF EXHIBIT

- ------------

* To be filed by amendment.

+ Previously filed.

@ Replaces previously filed exhibit.

** Confidential treatment has been requested for a portion of this exhibit.